At long last, renewable energy production in the USA is catching up with Europe and the rest of the world. Having been blessed with low energy prices, mainly because of low taxes and a policy of over dependence on cars and trucks for transportation, we are now waking up to the need to push hard toward achieving quick progress in this area. The sad thing is that we are repeating the 1970’s scenario, a scenario caused by the 1973 oil crisis and the rise of OPEC. The incredible increase then of oil prices from $2/Barrel to $11/Barrel was considered a huge jump. But with today’s oil prices in the $60/Barrel price range, we are not far from that of the 70’s prices, after we account for inflation. In short, oil prices are actually still low by that standard and the possibility of sharp increases are inevitable.
Note that in the 70’s the world oil consumption was around 30 Million Barrels per Day, but today it is approaching 100 Million Barrels per Day. Thus, with the more than tripling of demand, the price remained almost steady after inflation. Interestingly enough, the theory of doom and gloom was prevalent in the 70’s and the push for renewable energy projects and R&D was substantial. The Carter administration (1976-1980) has to be credited for placing renewables high on its energy policy agenda, with this policy fully marginalized by President Reagan and all those who followed.
Fortunately, the 1997 Kyoto Protocol and the pressure it imposed on the whole world, even the US that did not sign it, has had a major impact, as it recognized the societal impact of uncontrolled energy consumption – impacts on health, global warming and the environment in general. Thus although one may say let "markets" control the process of energy consumption through price mechanisms, we have now witnessed the fact that people are willing to pay a higher price for "green energy" thus stimulating that market considerably. Yet, there is no doubt that policy initiatives, with initial subsidies of green energy, will have to remain wit us for some time.
My prediction is that oil and gas prices will continue to climb sharply, simply to allow room for reduction in consumption via market mechanisms, thus opening the room for green energy to become truly economical, thus fulfilling, in part the dreams of the environmentalists. Note, however, that green energy sometimes is not always without environmental impacts. A Silicon PV cell will recover its energy inputs many years after it is put into use. Wind farms have their impacts on noise pollution, visual pollution and irregular power production, and so on.
On the whole, this trend of the use of renewable sources is such a relief and brings to memory the many years that I spent in the 70’s and 80’s in that field. Finally, this effort is paying off.
Stay tuned. In the meantime, I appreciate your direct feedback – adebs@dsipower.com