In 2018, the American energy sector and the hundreds of millions of consumers it serves daily could easily be summarized by a series of headlines:
Record surges in energy production. Continuing decreases in energy costs, in various pockets of the country, plus increases in renewable energy generation.
Oil prices went up and inventories went down. Then, they flipped. Policies pertaining to the production and exploration of energy had less red tape to hop over, but in some instances, still too much.
Spearheaded by America’s energy revolution, job growth went up — as did protesting efforts, for and against traditional energy production and infrastructure. In some cases, it got extreme. Still is.
With 2019 underway, here’s a look at what this year may bring:
The U.S. has been amid an energy revolution for years, and in 2018, that continued. In fact, in October, America produced more than 11.5 million barrels per day of oil and 96.7 billion cubic feet per day of gas, both record highs, per the U.S. Energy Information Administration (EIA).
The United States is now the world’s leading crude oil producer, surpassing Russia and Saudi Arabia, as production rose 79,000 barrels per day from September to 11.537 million in October of last year. America is also the leader in natural gas production globally. It has been the frontrunner in both production categories – oil and natural gas – the last seven years.
This leadership will only continue to grow, the EIA forecasts, adding that the U.S. will be “the undisputed oil and gas leader in the world over the next several decades.”
Now that the U.S. has claimed the mantle as world’s leader in oil and gas production, what will it do to maintain this new geopolitical clout?
The answer likely rests in what’s worked so far. That includes shale development, which — thanks to new, state-of-the-art equipment, improved procedures and continuously strong regulations — has experienced record growth in an array of basins from coast-to-coast. Growing renewables is another key asset; wind and solar energy resources have also outdone unprecedented growth records set in recent years.
So, too, is the federal government’s offshore energy plan proposal, and what the final word on the plan will be — a decision which could come as early as February.
In 2018, the U.S. surpassed 1 gigawatt of deployed energy storage. That’s enough energy to power roughly 700,000 homes. Moving into 2019, policymakers and industry leaders are working together to continue growing storage, especially with concerns now centered around solar policy, fire safety, access to lithium-ion cells and end-of-life care.
As the United States has continued to develop, grow and diversify its energy output, plans to construct, maintain or expand energy infrastructure projects has been put into motion across the country. States across the nation are looking at upgrades to meet new environmental goals but have also started replacing existing infrastructure and adding new capacity to help meet growing and changing demand. Such projects include oil and natural gas pipelines, transmission lines and a variety of power plants.
According to data provided by the Interstate Natural Gas Association of America (INGAA), Canada and the U.S. will need to add 7.7 million barrels per data per day of new oil transport capacity to ensure demands are met.
Yet conflicts around such infrastructure proposals remain heavily politicized, and many extreme activists opposed to all traditional energy and infrastructure development have reacted by waging protests, filing lawsuits and appeals, and vandalizing property to delay or kill infrastructure plans that would help move energy safely, meet demand and put more Americans back to work.
This conflict will continue, perhaps even surge, in 2019, with the most recent string of lawsuits set to hit the Supreme Court.
Centralized vs. Decentralized Power
While the energy debate often inaccurately portrays the energy debate as “clean” vs. “dirty,” the meat and bones of the argument has been increasingly centered on the fight between centralized and decentralized power, with both claiming environmental benefits and attributes enhancing resilience.
This isn’t, however, in the realm of public debate. For a quick recap: Centralized power is more in line with traditional energy generation. Think large facilities like power plants and hydroelectric dams, far away from end-users like families and small businesses, which utilize long supply lines like pipelines and transmission lines to power large-scale grids. It also means that large capital is usually needed.
Overall, most of the energy used by Americans comes via centralized power. It’s been historically abundant and reliable — and under the right regulatory climate, affordable.
Decentralized power is, overall, quite different. Think solar panels on homes, and less reliance on power lines or no supply lines. It’s grown exponentially in recent years and is a must for American energy independence – though it’s currently not nearly as plentiful as resources from centralized power. While it generally requires a smaller capital requirement, this is usually paid by consumers — not utilities.
This component of the overall debate, and how it unfolds in the ensuring months, will likely shape the narrative of energy production in 2019.
Lost in the loud, never-ending PR battle over energy production and infrastructure expansion is one of the few topics that opposing sides can agree on and have begun to make record improvements on: "decarbonization." It’s a term that could bring utilities, unions and environmental groups together while also saving the planet.
Case in point: The U.S. reduced its carbon emissions by 0.5 percent, the most of all major countries, in 2017, the latest world climate report from the BP Statistical Review of World Energy said. Greenhouse gas emissions have declined 2.7 percent since 2016, and emissions from large power plants have declined 19.7 percent since 2011, federal data shows. At the same time, energy production increased to historic levels and the American economy grew by nearly 3 percent – hitting all the talking points each side of the issue traditionally stresses.
Sustaining America’s global leadership in environmental protection and balancing it with its top ranking in energy production will be among the headlines that leaders and activists on both sides of the political aisle will keep a close eye on in 2019.
David Holt is president of the Consumer Energy Alliance (CEA).
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