When I attended the Governor’s Energy Development Conference in the Salt Palace this week, I expected a lot of gloom and doom, given low oil prices and the economic downturn in the Uintah Basin.
But I was pleasantly surprised to see that a great deal of optimism still exists in the broad Utah energy industry, which is a lot more diverse than a casual observer might expect.
It was an excellent conference, and the Governor’s Office of Energy Development is to be commended for putting it together. The speakers and panelists represented a broad spectrum of stakeholders and interests, including the environmental community.
Here are some takeaways after listening to energy experts for two days:
Unless we make some dumb mistakes, we are entering an era of energy abundance, which will be great for the economy and for household budgets.
Over time, the amount of energy derived from carbon-based sources (coal, gas and oil) is going to decline, while clean renewables and nuclear energy will ascend, making our energy future much cleaner. The technological advances in solar, wind, nuclear, and a variety of micro-energy sources is remarkable, and affordability is rising.
This transition to clean, carbon-free energy will take some time, and we ought not to force it too quickly or we risk damaging the economy and jobs and income levels. Cheap energy is required to create wealth. When people have money, they are more able to act on their environmental concerns. They have means to purchase electric cars, put solar panels on their roofs, and contribute to environmental groups. Wealth, derived in part by low energy costs, will speed the transition to a cleaner environment.
Utah’s “all-of-the-above” energy policy makes sense. As Gov. Herbert said during the conference, let the free market work. Don’t artificially constrain or boost one form of energy over another. The marketplace is undoubtedly going to take us to clean energy, but we’ll keep the lights on and commerce humming along the way if we don’t pick winners and losers.
Utah’s oil industry will come back, although perhaps not at the past peak boom levels. The oil extraction industry has become remarkably clean and environmentally responsible, although improvements need to be made in reducing methane leakage. Firms like Integrated Energy Companies provide state-of-the art environmental mitigation services.
The electric utility industry is undergoing a major transformation as distributed energy in the form of wind, solar, and other micro-energy sources disrupt the old utility model of massive, centralized generation stations. As this transformation occurs, public policy, rate structures and even the central missions of utilities must be revisited. This transition must be managed carefully and smoothly to maintain the stability of the grid and keep reliable electricity flowing to all sectors of society.