This is Part 1 of a paper written about the projected US Energy profile in the year 2050.
Creating a sustainable energy plan for the future is the most pressing issue of our day. As developing nations such as India and China rapidly industrialize, they are entering an extremely energy-intensive phase of the development cycle, rapidly increasing global energy demand. In addition, as fossil fuels run dry, prices could rise to prohibitive levels, causing reductions in human welfare. Across the globe, many different countries have taken leadership on the issue of creating clean, sustainable sources of energy supply and developing stricter standards to ensure greater efficiency and lower energy consumption. Unfortunately, the United States has consistently lagged behind other nations.
The European Union’s energy plan is probably the greatest example of a forward, far-reaching energy policy, focusing on both supply and demand. Just like the United States, the European Union has traditionally depended on fossil fuels for the vast majority of its energy production, including a particularly significant dependence on Russia for natural gas. Unlike the US, however, energy prices have always been heavily taxed in Europe, inherently putting much greater emphasis on cost-cutting and energy efficiency measures. These prices more accurately reflect the social cost to the environment as well as the private market cost. In 2008, the European Union introduced the 20/20/20 plan. By 2020, the EU has pledged to reduce greenhouse gas emissions by 20%, bring in 20% of all energy consumption from renewable resources, and create a 20% reduction in primary energy use through energy efficiency.
Another example is China. Although initially very slow to embrace renewable energy, China has recently become a world leader in the promotion of renewable technologies. In the past few years, China has invested an unprecedented amount of money into developing alternative energy technologies, attempting to avoid the pollution cycle that has plagued every other nation throughout the development process.
In 1997, the United Nations Framework Convention on Climate Change developed the Kyoto Protocol, aimed at promoting environmental sustainability. 187 nations across the globe have signed this treaty, with the notable exception being the United States. While the treaty does not directly address energy, its mandate to reduce greenhouse gas emissions invariably emphasizes the importance of cleaner, more sustainable technologies.
By the year 2050, we will have a vastly different world, one with significantly greater energy demands, alongside a supply that must grow to adjust to this demand. In developing our energy projections to 2050, we considered reports by energy experts in industry, policy and academia. In its “energy scenarios to 2050”, Shell offers two possible scenarios for the next 50 years. It’s first “scramble” scenario foresees a very reactive government response, focused primarily on the importance of energy security. In this scenario, the US government initially heavily supports coal as a domestic resource, followed by first generation biofuels, ultimately resulting in economically devastating consequences. Shell’s second “blueprint” scenario lays out a much more focused and proactive approach to energy sustainability and development. This scenario envisions a ground-up approach to reducing energy demand, coupled with a carbon emission trading system, greater global cooperation, and an emphasis on the integration of renewable technologies in electricity generation as well as transportation. It is in the best interests of the United States government to work with the international community and the private sector to strategically plan our energy future instead of scrambling reactively, like in the first scenario presented by Shell.
The Department of Energy’s Energy Information Administration issues annual energy outlooks (AEO). The AEO 2010 assumes that current laws and regulations remain unchanged and that those with sunset provisions expire on the sunset date. In our opinion, we believe that their estimates are conservative, since we expect changes to occur and new laws to be enacted. We believe that a carbon dioxide cap and trade system is in our near future. We believe that future energy legislation is both necessary and imminent. A carbon trading system complemented with increasing federal and state tax incentives will allow for the introduction of renewable technologies and pave the path for a more sustainable future.
In this report, we take a look at the current technologies of each major energy source and explore their economic, environmental, and political feasibilities. These analyses will shed some light into the future of the energy source and its role in the United States energy profile. We will end with our 2050 Energy Portfolio Projections and recommendations to the federal government to meet these goals.