December 2013, Vol. 240 No. 12


Meeting The Energy Sustainability Challenge

Charles D. McConnell, Executive Director, Energy and Environment Initiative, Rice University

Our world is rapidly changing at an unprecedented pace, and the 21st century poses many challenges – food, water, education, poverty and war to name but a few. Faced with all of these, it is important that we not overlook the fact that one key challenge – meeting the global demand for energy sustainability – will be fundamental to meeting all other challenges.

Why? Because energy sustainability underpins almost every other challenge we face. With affordable, clean, abundant energy, potable water from the sea is feasible. More productive agriculture is attainable. Sustainable economic growth is possible. Conflicts over limited resources are diminished. Our environment remains healthy. That is why achieving energy sustainability is fundamental. In fact, it’s the table stakes for ensuring our future.

It won’t be easy. Achieving energy sustainability will require society to use all forms of energy options as global demand doubles over the next 40 years. “All of the above” is a catchphrase that has been politicized, but it must be more than a slogan. It’s a requirement for energy sustainability.

What Is Energy Sustainability?
It is having sufficient, affordable energy to meet global demand and ensure economic growth while remaining environmentally responsible. Those three elements – affordability, security of supply and environmental responsibility – are the foundation.

How do we get there? How do we achieve energy sustainability? One of the first realities is admitting that this challenge will not be solved in five or 10 years and that developing short- and long-term goals and strategies is key.

“All of the above,” in terms of all sources of energy supply, is also a requirement. Politicizing choices based upon ideologies or special interests is harmful as it chooses a path of ignoring one versus another. We will require the contribution of all sources and recognition that technology has transformed the world in which we live.

Two hundred years ago, 97% of the world’s energy was produced by either man or beast. The Industrial Revolution changed how we live, and it set expectations for future generations that would have been inconceivable 200 years ago when people literally toiled in the dark to make a living. The steam engine, internal combustion engine, boilers and turbines transformed our energy mix, and today more than 85% of the world’s energy is derived from coal, oil and natural gas.

Meeting Environmental Challenges
That technology has also brought many other environmental challenges as well, but we have made dramatic advances when we have shown the will to do so. Since 1970, the growth of coal-fired energy is up nearly 200%, and the amount of total emissions of NOx, SOx, mercury, and particulates is down 90%. That technological transformation has affected everyone in a positive way.

It did not happen without a will to do so. Industry and government worked together, invested together, to effect change. That model must be embraced rather than one of choosing a winner and loser.

Perhaps one thing we can all agree on is that we’d rather pay less for something than more. So let’s discuss energy affordability for a moment.

What is expensive? What is too expensive? Can that mean different things to different people? What is an inconceivable cost, and when does cost not matter – or is that ever really true? Is it better to have a good deal today or position for tomorrow? How will we know if we have a good deal or a good position?

For years, energy affordability has been defined by the supply chain for these fossil fuels. Where are they? How much does it cost to produce them? What is their relative abundance or scarcity and how does that change based on the technologies we’re using to extract them? Affordability has always been at or near the top when choices were made about the energy requirements for our global infrastructure – particularly the rail, auto and truck transport and shipping that drive global commerce and travel.

Choice Driven By Affordability
As it always has, affordability will drive global choice in the future. Developing nations want energy and will choose the most cost-effective supply. Is coal cheaper than oil? Is oil cheaper than gas? Are renewables a less expensive option when infrastructure costs have not yet been made? What about nuclear? If we invest everything into just one of these options, can we say with certainty that the next incremental unit of energy will be less expensive than the last?

No, we cannot. That’s why we must have a portfolio of choices and options. The global cost of oil, gas and coal has changed over time and will continue to do so; no one in the energy business or individual nations that has survived has done that by picking a winner. Variability and change in global pricing abounds every day from financial arbitrages, to supply chain interruption, to regulatory and environmental concerns, to acts of weather and nature that can change affordability and willingness to pay on a moment’s notice.

To be truly positioned to provide affordable energy, a nation or society must have a portfolio of energy choices – and a willingness to invest in sustainable technology advances that allow that portfolio to meet the challenges of affordability, security of supply and environmental responsibility.

Security of supply has become another way of saying of “energy independence” or “getting away from foreign supply,” or “self-sufficiency.” But that’s not really correct. Energy is a global business that is driven by geopolitics and international markets. Security doesn’t come from being dissociated from world energy markets. I would argue that in the long term, the drive for “energy independence” – while it may provide an illusion of feeling more secure – will actually decrease the security of our energy supply.

Defining Real Energy Security
Real security of supply will come instead from access to a broad portfolio of energy choices. Having a portfolio of options ensures supply despite disruptions from global politics, weather, technology, and supply and distribution chain interruption. The portfolio grants you the assurance that you will have what you need when you need it.

And that kind of assurance is going to be more difficult to come by as the global demand for energy increases. Today, more than 20% of the world (1.7 billion people) lives in energy poverty, without access to the basic electricity and fuel that the developed world takes for granted. The pursuit of “energizing” the rest of the world will drive demand and require every electron, therm and molecule of energy from all sources all over the world.

Which brings us to environmental responsibility.

If we have learned anything over the past 200 years, it is that a disregard for our earth and atmosphere is not sustainable. As a people, we can and must take these challenges seriously. We must not run from facts but meet them head-on and use them to affect and sustain our energy future. Investing in and embracing new technology is the only way.

We will not be environmentally responsible if we ignore the challenges of using fossil fuels. Some would argue that eliminating fossil fuels will solve our energy problem. That may be a goal in the long term, but we must take action today so there is a “long term.” In the foreseeable future, technology can and must be applied to the use of fossil fuels because even if we add every possible alternative energy and renewable option, the global demand for energy will require “All of the above.” We don’t have the luxury of picking winners and losers; we have to make all choices be sustainable winners.

Given our reliance on fossil fuels, we must invest in new technologies to develop and use them in an environmentally responsible way. This is another area in which we must have clear eyes, see the global picture and look beyond domestic sectors of the market. While in America, many point to coal consumption in the U.S. being down 20% year over year; global demand is up 20% year over year and will continue to grow.

It is no secret that we’re using less coal in the U.S. because of the dramatic change that has taken place in natural gas extraction over the past decade. Fracking technology has transformed the domestic energy market in ways few thought possible. Yet water use and local community acceptance of the technology is challenged every day. If this shows us anything, it is that industry does not have a fundamental right to operate. Rather, it must earn that right with sound technology and practices that are environmentally responsible.

Importance Of Future Technologies
And now we’ve come full circle, back to the human aspects of energy sustainability. The lessons we learn from fracking also will apply to future technologies – the ones we have yet to invent – that allow us to bring together a portfolio of energy choices to meet the world’s growing demand for energy. Those technologies and transformative improvements will also require sound policy and a rational regulatory structure that enables energy sustainability.

Achieving energy sustainability will require us to move beyond bad questions that pose false dichotomies: Is it good for business or good for the environment? Is it affordable or is it secure? We cannot be compelled to give an answer. The answer is “yes” to all. Yes to energy sustainability through affordability, security of supply and environmental responsibility.

And yes to using all of our capabilities to get there. One reason I am excited to be at Rice University is because our Energy and Environment Initiative is committed to use all of its capabilities in the sciences, engineering, humanities, social sciences, macro and market economics, and public policy to address energy sustainability. We realize that collaboration with industry and the broad spectrum of marketplace stakeholders is a must, and we wish to provide a nonpartisan center point for fact-based solutions for our future.

We need as much of that spirit as we can muster because real problem-solving is hard work. Solving our energy sustainability problems is not just the sensible thing to do, or the right thing based upon an ideology, or the expedient thing based on a political position. It is the only thing to do if we are to tackle the most pressing problems that face our world today.

Charles D. McConnell
is executive director of Rice University’s Energy and Environment Initiative, a university-wide integration of science, engineering, economic analysis, policy and social sciences designed to form effective marketplace collaborations to address the diverse issues and challenges associated with energy security, affordability and environmental sustainability. A 35-year veteran of the energy industry, McConnell joined Rice in August 2013 after serving the previous two years as the assistant secretary of energy at the U.S. Department of Energy.

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