Beyond Petroleum...A Global Impetus for Clean Energy
OP-ED by Tony Munoz, Editor-in-Chief of the Maritime Executive Magazine and the MarEx Newsletter
While the U.S. struggles with its oil spill crisis in the Gulf, which will bring about a new series of regulatory mandates on the oil industry, other issues like “cap and trade” and the EPA’s clean-air regulations have gained more traction on Capitol Hill due to the spill. The global economy and especially the U.S. economic engine are still driven by a material that was created in geological processes over millions of years and is now being rapidly depleted in less than two hundred years of consumption. However, there is the dawning of a new worldwide industry—clean energy—which has experienced a 230 percent increase in investment since 2005.
In 2009, $162 billion was invested in clean energy around the world and during the worst financial downturn in more than half a century; the clean energy sector declined only 6.6 percent. Solar thermal, photovoltaics, wind power, ocean energy, biomass and geothermal are not predicated on stores built on the Earth’s millenniums of existence nor will they leave behind a legacy of debt for future generations to pay off. In fact, it’s quite the opposite: Renewable energy could become one of the fastest growing sectors in the U.S. economy much like it is in the European Union and China.
While China is emerging as the clean energy powerhouse, the U.S. stands at the crossroads between fossil fuels reliance and leadership in clean energy resources. But the House and Senate are once again demonstrating to the people their inability to comprehend the perilous situation as legislation to reduce global warming pollution and the promotion of renewable energy policies languishes in Congress, being used as a political football.
Leading Democrats, including John Kerry and Barbara Boxer, claim curbing greenhouse gases is vital to ending our dependence on oil and point to the BP spill to make their case, while GOP leaders like James Inhofe point to climate legislation as nothing more than a “national energy tax.” Inhofe also claims that leading climate proposals would have little effect on the nation’s use of 20 million barrels of oil per day and that “cap-and-trade” bills would have little impact, if any, on the use of oil in the next few decades.
While the U.S. is a nation wallowing in political gridlock, the Chinese invested $34.6 billion in clean energy in 2009 and took the top spot in G20 country investments in clean resources as the U.S. lagged behind with an $18.6 billion investment. The US would have fallen behind even further in 2009 if it had not been for long-term extensions of federal production and investment tax credits and initial funding from the American Recovery and Reinvestment Act. But there are many reasons to be concerned about the U.S.’s competitive position in the clean energy marketplace because China has built a very strong manufacturing base and export markets while aggressively investing in domestic clean energy-generating capacity.
The U.S. investment in clean energy has doubled over the past five years, but its growth rate lagged behind countries like Turkey, Brazil, China, the UK and Italy. In terms of political polices encouraging clean energy the UK, Germany, Spain and Brazil remain the leaders. Compared to other G20 nations, the U.S. has a weak clean energy policy and ranks 11th. Furthermore, nations like Germany, Brazil, Spain and China have taken leaderships roles in adopting national renewable energy and efficiency standards; incentive feed tariffs, carbon reduction targets and/or financial incentives for investment and production of clean energy.
While China has set aggressive targets for wind, biomass and solar energy, the EU has initiated an economy-wide cap on carbon emissions and ambitious reduction goals, and Brazil is leading in ethanol fuel targets for its nation. The U.S. has no carbon policies and maintains a patchwork of state-driven energy initiatives, but the U.S. possesses entrepreneurial abilities and huge intellectual resources that can quickly gain ground in the race for clean energy leadership. The Cape Wind Project is a great start, but the planned capacity had to be reduced because of its visual effect on the historic landscape, and now its nearest distance to the coast is about 5.2 miles. It will have a capacity of 468 megawatts with 130 turbines of 3.6 megawatts each.
In the EU, every state had to provide a plan of action under the 2009 Directive for Promotion of the Use of Energy from Renewable Sources. The goal is to ensure that at least one fifth of energy consumed in the EU by 2020 is from renewable resources. Each country in the EU must formally announce how it intends to make its 20 percent contribution of renewable energy usage by the end of 2010. What is critical is that the EU intends to expand and integrate power grids with wind and solar energy resources. Knock, knock… is anybody awake on Capitol Hill?
As the petroleum industry expands its search for oil and gas on every continent on the planet, they are faced with the ever-changing geopolitical and geo-economic landscape. Operating within the scope of social, cultural, economic and geological factors, oil companies are now required to provide lots of money for diplomacy, infrastructure building, environmental compliance and remediation, transportation, and investment in extraction technologies. But in a volatile world of conflicts and wars over oil, and governments nationalizing natural resources, let’s hope that the winds of political change can finally empower the U.S. to swing the pendulum forever in favor of clean energy.