The U.S. has a broad and diverse range of energy resources, and all of them — from coal and gas to nuclear and renewables — are critical to the nation’s clean energy future.
That was the message coming out of the U.S. Energy Association’s 2022 State of the Energy Industry Forum on Thursday, where industry leaders said the sector also creates thousands of well-paying jobs that support families and communities.
Those leaders were mostly buoyed by passage of the bipartisan Infrastructure Investment and Jobs Act and individually supported various energy provisions in the stalled Build Back Better Act, which they say have broad, bipartisan support.
Another common theme during the day-long forum: the need to collaborate across industry sectors and with regulators and lawmakers.
Julia Hamm, CEO of the Smart Electric Power Alliance, said that almost 70% of U.S. consumers are now served by an electric utility that has committed to a 100% carbon reduction target. But the utilities making the most progress toward those goals are the ones partnering “outside the four walls” of their organizations and engaging with stakeholders “in a way in which it’s never happened before.”
“We really need to see utilities partnering together with technology companies, with their customers, with environmental groups and other stakeholders in order to get where we need to go,” Hamm said.
For Mike Sommers, CEO of the American Petroleum Institute, cooperation is necessary “to ensure the supply of U.S. energy, including solar, wind and nuclear and, yes, petroleum products.”
Sommers said that even if every Paris Agreement signatory meets their 2040 commitments, the International Energy Agency projects that natural gas and oil will still account for almost half of all energy used.
“The only real decision here is where natural gas and oil are produced,” he said.
The Case for Fossil Fuels
Fossil fuel associations made up more than a third of the speakers at the forum, reflecting the sector’s continued economic and political power. And like Sommers, each of their representatives offered up a range of statistics underlining the pragmatic and economic need for their products and services now and in the future.
“We’ve got 187 million Americans that are using natural gas in their homes as we speak,” said Karen Harbert, CEO of the American Gas Association. “So, we are a fuel of choice and a fuel in demand. Five-and-a-half million businesses are using natural gas right now in their industrial applications, making the things that life revolves around; so, we really see ourselves as foundational to the energy system and foundational to our way of life.”
“There are 200 million cars and trucks on the road, and they consumed more than 140 billion gallons of gasoline in 2019,” said Andrew Black, CEO of the Association of Oil Pipelines. “Together we Americans make 20 million visits to a gasoline station each day. There are other ways to deliver all this energy like trains and trucks, but none of them can handle this volume. Over 13 trains each a mile long with 100 rail cars are needed to equal the volume one large pipeline delivers on a single day.”
At the same time, Black and others also stressed their commitment to sustainability and cutting emissions.
“Pipelines deliver liquid energy using the least amount of greenhouse gas emissions with the lowest impact on the environment,” Black said. “Trains and trucks both emit more GHGs than pipelines, 42% more from rail, 467% more for trucks. … Liquid pipelines are the sustainable energy delivery choice.”
Amy Andryszak, CEO of the Interstate Natural Gas Association of America, cited research from the National Bureau of Economic Research showing “a correlation between the growth of natural gas for power generation and the increased deployment of renewables.”
“If we want to expand the use of renewable energy, natural gas is the answer,” Andryszak said. “The Biden administration has made a major commitment to expanding the use of renewable energy in the United States, particularly wind and solar. But we all must recognize that these technologies are complementary to natural gas, and they require a robust natural gas infrastructure to ensure affordability and reliability.”
Michelle Bloodworth, CEO of America’s Power, a coal industry trade organization, more aggressively argued that clean energy expansion poses significant challenges to an electric grid that “hangs in a fragile balance that requires not just close monitoring and care, but thoughtful and good energy policy.”
Energy markets need to put a value on the attributes of coal and send a signal to participants that those attributes are needed, she said.
“Rather than working to eliminate fossil fuels from the mix … [the Biden administration] should work hand-in-hand with the fossil fuel industry, including the coal sector, to make fossil fuels even more environmentally sustainable,” Bloodworth said.
Gas Experts: ‘Plenty of Supply’
At the same time, natural gas industry leaders countered current perceptions of a winter supply crunch, saying natural gas production has rebounded following a pandemic dip, and prices should return to pre-pandemic levels in the spring.
Natural Gas Supply Association CEO Dena Wiggins said domestic gas production is up 4 billion cubic feet per day compared to 2020, while Charlie Riedl, executive director for the Center for Liquified Natural Gas, said global demand hit a record high of 12.2 Bcf/d in December.
During the most restrictive phase of the pandemic in summer 2020, Wiggins said the U.S. had about 9,000 drilled but uncompleted wells, but in recent months, thousands of those wells have begun producing.
“We think there’s plenty of supply to meet demand, and we think that there will be plenty of supply to meet demand,” Wiggins said. “We get a lot of press when it’s a cold day in January and spot prices are high. … It gives people pause and makes people talk about high prices.”
Wiggins said not much gas typically sells at those prices in frigid weather; rather, those buying at those prices likely have not secured contracts.
“If you wait until the day before Christmas Eve to buy a plane ticket to go home and see mom, that is going to be an expensive plane ticket,” she said.
Wiggins reassured attendees that the U.S. has enough natural gas supply for the domestic market and exports. She said gas exports remain important for other countries to meet their own emissions reductions goals.
‘A Healthy, Growing Sector’
While fewer in number, renewable energy groups also sent a message of ongoing growth and sustainability that can weather the uncertainties of politics, supply chains and COVID-19.
Even during the administration of former President Donald Trump, the private sector pumped $56 billion into renewables in 2020, said Gregory Wetstone, CEO of the American Council on Renewable Energy (ACORE).
Noting that the U.S. added an estimated 46 GW of renewables in 2021, Wetstone said, “This is a healthy and growing sector.”
Utilities and corporate buyers are a major part of that growth, with 17 GW of clean energy contracts announced and “a record 110 GW of clean power under construction or in advanced development,” said Heather Zichal, CEO of the American Clean Power Association.
While 2021 was pivotal for solar, wind and storage, Zichal said 2022 will determine whether they “accelerate progress” or “plateau.” To be successful, she said, the industries need Congress to pass the Build Back Better Act, and everyone must be engaged in regulation and policy at the federal, state and local levels.
Erin Duncan, vice president of congressional affairs for the Solar Energy Industries Association (SEIA), focused on her industry’s priorities in the bill, including the 10-year extension of the solar investment tax credit and advanced manufacturing credits that would cover essential parts of the solar supply chain, such as inverters and racking.
A 10-year ITC will provide the “long runway” manufacturers say they need “so that they [know] there would be demand for solar,” Duncan said. A complementary manufacturing credit “would help offset some of the costs of bringing domestic production back to this country,” she said.
“You can’t just snap your fingers overnight and suddenly have a hotline to [solar] cell plants; those take time to build,” she said. “We’re going to need to continue to import materials from abroad, and so it’s a balance of how you continue to build out domestic supply chains … and [drive] demand.”
SEIA wants solar to grow from its current 4% of the U.S. energy mix to 30% by 2030, a target that will require the industry “to deploy more than we’ve ever deployed in prior years every year to reach the 850 GW of capacity we’re going to need,” Duncan said.
ACORE estimates that scaling the industry to that extent could mean an annual private sector investment of $93 billion through 2029 to keep the world on track for net-zero emissions by 2050, Wetstone said.