How we could blow the energy boom
If we don’t invest in improving our electrical energy grid, it’s all for nought. Jeffrey Leonard writes in The Washington Monthly:
For the first time in four decades, spanning the last eight presidents, America is poised to break free of its energy crisis. The country finds itself suddenly awash in domestic energy, especially new supplies of natural gas extracted from shale rock. The economic windfall is already enormous. According to a recent study by energy analysts, consumers saved more than $100 billion in 2010 alone as a direct result of the natural gas boom. Economists at Bank of America calculate that the boom contributes nearly $1 billion per day to the economy, equal to 2.2 percent of GDP—roughly the same as the economy’s rate of growth in recent years.
The environmental windfall is also substantial. Relatively clean-burning natural gas is rapidly replacing coal as our primary source of electricity, leading to reductions in greenhouse gas emissions. Gas-fired power plants are also more easily integrated with renewable energy sources such as wind or solar, giving that industry a boost. The potential benefits of the gas boom also include the promise of a manufacturing revival in the U.S. based on the comparative advantage of lower energy costs, and the opportunity for the country to overcome its chronic trade deficits. This “energy dividend” could be, in other words, the biggest game changer in global politics and economics in a generation.
Yet this bright shiny future is hardly assured. While natural gas deposits could very well yield enough to sustain our energy needs for another century, there are many reasons to fear that we won’t succeed in maintaining adequate supplies of economically available natural gas, or in putting enough of it to optimal use—generating electricity.
More fundamentally, in order to capitalize on today’s energy dividend, we need to meet a second essential precondition: repairing, expanding, and modernizing our overstrained electrical grid. As it stands, the grid—an interconnected network of 360,000 miles of transmission lines and substations linking more than 6,000 power plants to customers nationwide—is an inefficient and increasingly blackout-prone tangle of 1950s technology. In its present dilapidated state, it is not only imposing unacceptable and avoidable environmental costs due to its inefficiency, it is also making us vulnerable to an array of threats that could dramatically impair the U.S. economy tomorrow—regardless of how much surplus energy we have in the ground.
The gas boom could bring us nearly limitless potential for building a greener and more prosperous future. Yet without long-term planning and bold political leadership to fight for the right policies, America may wind up awash in cheap energy, while American homes and businesses are stuck in the dark.
Many people will come to this subject concerned about the environmental consequences of “fracking”—that is, hydraulic fracturing—of natural gas, and it’s certainly an important issue. But as this magazine has argued (see Jesse Zwick, “Clean, Cheap, and Out of Control,” May/June 2011), with the right regulations we can reduce the adverse environmental consequences without fundamentally altering the total volume of natural gas produced. . .