Kudos to the energy entrepreneurs and innovators! Their efforts over the past decades have been heroic, given the challenges they face. Having been a part of the energy industry as president and CEO of GE Power Systems and now working in private equity, I have had the opportunity to invest in and work directly with these innovators, and I’ve seen just what they can do – and how their contributions can help our country move toward energy independence.
It’s a goal that didn’t seem attainable a few years back.
Many may not recall the last true “energy crisis,” but for me, it’s a very vivid memory. Back in 1973, I was working as a young manufacturing engineer at GE, and I saw how the U.S. was nearly crippled by an Arab oil embargo. At the time, the U.S. was importing 35 percent of its oil, and President Richard Nixon proclaimed that the country should work toward energy independence. Nixon’s goal seemed lofty, but attainable.
Instead of learning from the oil crisis we faced that year, though, we actually boosted our imports. Daniel Yergin, a Pulitzer Prize-winning author and co-founder and chairman of the Cambridge Energy Research Associates (CERA), reports in Politico magazine that by 2005, the U.S. was importing 60 percent of its oil, even as our oil production and natural gas output went down.
Although intentions have been good in the past, only through the dedication and perseverance of industry leaders and innovators can our country truly become energy independent. Today, our oil imports have fallen to Nixon-era levels, thanks to increased production, improvements in automobile efficiency, and numerous energy-saving inventions – and the goal once again is within reach.
Attaining true energy independence should be one of our nation’s top priorities and – if given the chance – it’s the one thing I’d fix. Here’s why:
It’s a major job creator. The Environmental and Energy Study Institute (EESI) estimated in 2013 that the “clean” energy industry alone accounted for about a million jobs in our country. In 2012, energy production supported 2.1 million jobs, and global information company IHS believes that figure will rise to 3.3 million jobs by 2020. Washington, D.C. non-profit The Solar Foundation estimated that solar jobs increased nearly 20 percent between 2012 and 2013 — 10 times the national average job growth rate. The hiring pace, too, was 50 percent higher than it had been the year before.
Energy efficiency is another job-creating vehicle. About 380,000 people were estimated to be employed in that space in 2008, according to the Lawrence Berkeley National Laboratory. The United States could create 1.3 to 1.9 million jobs by 2050 through the deployment of energy efficient technologies, says the American Council for an Energy-Efficient Economy (ACEEE).
It brings in tax revenues. Clearly one of the biggest incremental contributors to our tax revenues, and therefore to debt reduction, the country’s energy boom accounted for an additional $74 billion in federal and state coffers in 2012, according to the IHS.
It’s just good for business. GasBuddy.com predicts that gas prices will drop in November to under $3 a gallon – the lowest they’ve been in four years. The reason: more U.S. production and less demand, brought about in part by more efficient vehicles. Translate those declining gas prices to dollars that the average family will be able to use toward other goods and services. The resulting GDP growth will help bring down the percentage of those who are underemployed while increasing overall employment levels.
It combats global insecurity. At a time when there is so much uncertainty on a global basis, being dependent on other nations for what is essentially the lifeblood of our economy is unwise. Additionally, we can use our new-found energy independence to garner political support and gain allies, thanks to our ability to export oil and gas to countries that face embargo threats.
So how do we achieve this not-so-lofty goal?
First, don’t get too married to one fuel source. Each has its pros and cons – and deserves open and honest debate by our key scientists and experts. That debate must focus on our nation’s common objective of energy independence. Ideally, the solution will be derived by selecting the optimal combination of all fuel choices and generation options. A mix of solutions that includes oil & gas and renewables, as well as increased efficiencies, can contribute to that goal and, in the process, even improve the air we breathe.
Second, reward the entrepreneurs. Although quite fragmented, this group should be recognized and rewarded as they drive technology and innovation that can help us achieve our energy goals. One such innovation is horizontal drilling, which multiplies well recovery rates – meaning more money for mineral owners as well as increased tax revenues, Daniel Blackmon writes in Forbes. Since one horizontal well can replace numerous vertical wells, land and water can be saved and emissions decreased.
Yes, funding our innovators can lead to the next big break-through. Let’s applaud and recognize this industry for what it has accomplished. And let’s encourage it through policy and practice to continue the quest toward achieving true energy independence on a reliable, predictable and profitable basis for all – the country, the industry, and the consumer.
Energy independence can be a game changer – creating jobs, reducing our deficit, bringing in tax revenues, and reducing our imports. Bravo to the energy entrepreneurs and innovators, who will help us fuel our own growth!