In 2019, renewable energy passed coal as an energy source, which is now cheaper to operate and build than new coal facilities and creates way less carbon emissions. Utilities have been investing big in renewable because they are cheaper and because the incremental increases needed are small, but large power plants are not. Power utilities get a return on investment of used and useful facilities, not excess capacity that is waiting to be used. Florida’s NextERA is one of these companies investing heavily in green energy. Recent shareholder meetings at Exxon and Shell included the election of new Board members that have less carbon intensive energy as a priority. So the other big energy companies are going green as well. The market is telling us that we are undergoing a transition to a new energy future whether people like it or not. Profits are in the new future, not the past, which means some current energy industries are past their prime. Not that these companies will disappear immediately, but the end is coming unless they reinvent themselves. My Concord coach-making ancestors could not pivot fast enough to survive.
The question is what to do about industries that are past their prime? Joe Biden – if you are listening – job training! We must retrain workers who’s jobs are going away. Just as the horse and buggy operators vanished with cars, so shall the coal miner. Making soalr panels is cleaner and less risky than coal mining. Wyoming, Montana and West Virginia are states where Coal jobs are leaving. These workers need to be trained to do other work. Something maybe less risky than coal mining like making solar panels. Oh wait – that is exactly what Biden proposed to do in West Virginia.
Likewise making wind turbines is manufacturing like car and airplane engines. Maybe re-visioning industries in the Midwest could help address under and unemployment problems in communities where manufacturing has left or is leaving. The problem is hanging onto the past. Retraining workers in Detroit and Flint to do windmills could help reinvigorate those economies. Let’s get Jamie DImon and Biden together and see what they can come up with. Dimon is investing private Chase dollars already. Maybe some federal funds to give him the incentive to invest more?
Power company analysis in Power magazine in 2020, shows that companies like NextEra here in Florida has converted almost entirely to natural gas and renewables over the past 7 years (nuclear remained constant). So has Berkshire Hathaways’ energy portfolio and Dominion Energy. Making things more efficient with less emissions has already started, but could be accelerated if the right incentive are in place. This is something Biden’s infrastructure plan is proposing.
The Biden proposal also wants to set goals for electric by 2035 and trucks by 2040. That will require a lot of incentives. Let’s start with the challenge of “energy” stations. We take for granted that there are gas stations everywhere. Easy access, no risk of running out if you pay attention to the fuel gage. Charging stations are far less common and they currently lack consistency. It’s like the old Word vs Wordperfect challenge. All charging mechanisms need to be the same (Ford, Toyota, Elon!). Lack of charging stations is a huge challenge to overcome and incentives are needed to add stations. About 500,000 stations would need to be created to compete with gas access according to EDF. Biden notes this in his plan.
Next is the energy needed to power these charging stations. That mean more electrical power generation. Where does that come from? More power means more gas fired power plant of renewables. Renewables are easier to construct because they can be done in small increments, but the grid needs to be hardened. And who pays? And how? I can just see the long line on the Florida Turnpike to use the one charging station at the service plaza. That is guaranteed to fail unless there is a plan. And then the private sector engaged to implement the plan.
More electric vehicles will make Ford, GM and Tesla happy. Maybe more people work in US factories as incentives? That would help many US communities. But, as electric vehicle increase, what happens to oil and gas? Oil and gas would decline without federal subsidies, so where do those workers go? Clearly to fund large increases in electric vehicles we need more power and gas seems like the place to get the reliable energy. But over 200 oil and gas companies had gone under since 2014 per Earthworks, Journal. As oil has been less than $60 per barrel, and gas at $3/cf, oil and gas companies have struggled. The big corporations are investing green. What about the smaller ones? These guys need an answer also. One answer included in Biden’s infrastructure plan is $16 billion for the proper abandonment of old oil and gas wells. Another $8 billion is for fixing old mining sites (maybe we can actually get that dirty water and coal ash away from our water supplies please)!! Abandonment (properly) of old coal mines in West Virginia is a top priority for these funds. Maybe get the coal ash piles to a proper disposal site. Superfund monies could be used (if we bring back the taxes that funded it). These people, already familiar with the products, could be retrained to cleanup the messes their companies created. More, better paying jobs. But we need training.
Oil and gas relates to pipelines as well. We hear a lot about Keystone pipelines among others. Pipeline construction is a solution for oil, tar sands and gas movement. It is safer than most other options and provides construction jobs. But pipelines leak. Railroads like moving oil and gas because it is profitable. They do not like pipelines. So how to address these issues. Rail had made a comeback because is it cheaper to ship by rail than by truck. Grain and aggregate are big rail opportunities. So is oil. So how do we flip the options to ship green power by rail to the sunny (or windy) places to keep these entities busy. Rail has invested $25 B annually in private funds toward rail upgrades, and a total of $0.74 trillion in the past 5 years on capital improvements (which got them to a B), and accounts for 40% of long distance freight volume while accounting for only 0.6% of emissions.
The economy is interconnected. We can use government to pursue concepts like greener power that is less concentrated and potentially more sustainable. But there are winners and losers in that game, something many do not believe government should create, but it is clear that for progress to occur, there needs to be some intervention – encourage those who will win the future, and provide a safety net to those who will not. Electric vehicles vs coal miners. We can do this. This is what government should do. The solutions needs to figure a means to limit the losses by creating solutions to keep people employed. That is important for our communities, and our water systems. We do not want to end up in a challenging place.