Joseph A. Stanislaw, President, Cambridge Energy Research Associates, Cambridge, Mass., USA
A global economy fuelled by an assortment of alternative, non-hydrocarbon technologies is widely hailed as the ultimate pathway to sustainable economic growth. But the challenge of bridging the immense gap between our hydrocarbon-based global economy and this vision is complex and daunting.
Creating a sustainable economy is not simply a matter of developing the necessary technologies. There are intermediate steps needed that involve political and societal changes on national and global scales.
The road to sustainable economic development will be long and arduous, with many obstacles along the way. But government and industry must begin charting a pathway to the energy future.
For decades, we have been pushing on a string, trying to move forward with E.F. Schumacher’s ‘small is beautiful’ appropriate technologies idea, Buckminster Fuller’s dream of applying design science toward humanity’s success, and other admirable aspirations. But even today, the technologies are not quite ready – in an economic, technical, and market sense. Although there are some policies in place to support their development, they are not aligned with the market infrastructure, the realities of consumer behaviour, or local stakeholder concerns. And the timeline for their adoption is too ambitious and invites scepticism.
You cannot push on a string; it collapses. We must find a way to pull industry, and society as a whole, into the future. What is needed is a balanced approach that decouples energy use from economic growth. But it will take time to effect this decoupling.
Development of the necessary technologies is an essential step, and that process is well advanced. But there is a missing component necessary for transitioning to sustainable growth – the alignment of policy and technology in a realistic time line. This element will establish the needed break between economic growth and energy use. But there is currently no political consensus in this area, nor is there technological consensus.
It will take two to three decades or more to make the transition to a sustainable future. In the meantime, we must accept the reality that we will continue to use hydrocarbons as our primary fuel source. The question we should be asking is: What can we do to lessen that dependence while trying to realise these transformations?
The answer is to put in place a process that aligns energy policies, technology development realities, and feasible social changes within an achievable time frame. For the US, in the near- to mid-term that means encouraging development of all available pathways to a sustainable economy – through national energy policies that are nearly identical to those policies for energy security, including:
- Diversifying sources of energy imports
- Reducing demand through increased efficiency standards
- Increasing access to domestic resources
- Developing and commercialising innovative, non-hydrocarbon energy technologies.
Longer term, our focus should be on facilitating and accelerating the penetration of existing markets with new technologies. But it is now that we must begin to develop and implement market-supporting policies so that they will be in place to launch alternative energy technologies.
This process can begin with simple programmes related to increasing energy efficiency for vehicles, homes and businesses. If American households reduced their thermostats in wintertime by just 2°F, the US could save 0.5-1 billion ft3 of natural gas – an amount sufficient to eliminate one receiving terminal for importing liquefied natural gas.
Our first wake-up call came as a result of the Arab oil embargo in the mid-1970s. The policy reaction at that time was to implement stronger energy efficiency guidelines, such as the introduction of mandatory Corporate Average Fuel Economy (CAFE) standards. The US has since lost sight of such goals, but regardless of this, the landscape is different now and the stakes are higher. And policy must incorporate the fact that efficiency is not just about establishing standards, but supporting our ever-growing desire for mobility with new non-hydrocarbon technologies. At issue is not just national energy policy but sustainable growth and development on a global scale.
Stanislaw: energy companies should take the lead in the transition to a sustainable future
Although the petroleum industry has been the primary target of those demanding immediate change, the power industry also has received a great deal of pressure. All of us need to face three overarching global realities where energy policy is concerned.
- There is a new ‘globality’ at work – a recognition of the interconnected nature of the global economy and information infrastructure that transcends barriers of culture, religion, history, and national identity.
- A new international political dynamic is taking shape in which unilateralism is widely resisted on a range of issues, from the environment to trade to energy.
- A new reality of energy security goes beyond single borders, taking into account how domestic supplies can be increased and energy efficiencies improved.
For at least the next decade, the world will continue to consume greater quantities of natural gas and coal to produce the electricity that will feed economic growth. But energy companies – and most importantly the power industry – can still create a more sustainable world during this period through carbon sequestration, clean coal technologies and emissions trading.
The industry has a very important role to play in creating the transition to a sustainable future. If energy companies take the lead now in developing new technologies while perfecting the old ones, they will be in a better position to define the kind of business they are going to be in 20, 30, or 40 years hence.
Had we had this vision 30 years ago and steered the course, we might be asking different questions today. We cannot afford to find ourselves in another quarter century asking the wrong questions. Unless we move now to link our energy past with our vision of the future, that future will remain an elusive goal.