With many of the world’s largest energy CEO’s meeting last week at the annual Cambridge Energy Research Associates (CERA) conference, I thought it appropriate to discuss the ideal source mix for the World’s energy needs. We’ve seen a sort of “over-exuberance” for making green/renewable energy sources the majority of our energy mix and the Obama administration has been at the forefront of this push. The DOE annual budget has significant increases for wind and solar, yet does very little (negative in some cases via tax-break cuts) for the classic sources (oil, gas, coal).
Needless to say, the leaders of the major oil & gas companies have become extremely outspoken with their opposition. ConocoPhillips CEO Jamie Mulva (a fellow Longhorn) had this to say,
“We must overcome the opposition of the ‘hydrocarbon deniers’…those who believe that renewable energy will quickly and easily replace hydrocarbons and cure all that ails us.”
Given Mulva’s position, it should come as no surprise that he feels this way about “competitors” to his oil & gas, but I think his words are a dose of reality. All too often we hear about some new “silver-bullet” solution and our politicians keep vowing to rid the US of our dependence on foreign oil by throwing gobs of money at the new solution. As we’ve learned in this class, there is no single, best solution, so it’s completely unrealistic to rid ourselves entirely of oil, gas, and coal.
While I think it’s important to increase our usage of renewable sources, I am a staunch believer in economic and fiscal “intelligence” in the development of these sources. If a new technology does not make much sense economically, even with extensive subsidies (I’m looking at you Ethanol), then it should have no business being pursued.
Source: New York Times, “Oil Execs Chortle as Obama Admin Promotes Renewables”, http://www.nytimes.com/gwire/2010/03/10/10greenwire-oil-execs-chortle-as-obama-admin-promotes-rene-73770.html