The Shifting Geography, Technology, and Politics of U.S. Energy Production

By Joe Browder

Joe Browder of Washington, DC, an active participant in Meeting of the Minds, is a consultant to global energy and automotive companies, NGOs and to Native American groups, chairs the Advisory Committee of China’s ChangCe Institute and is a member of the Advisory Board of Carnegie Mellon University’s Center for the Study of the Electricity Industry.

Jul 18, 2013 | Smart Cities | 2 comments

Most of us are accustomed to thinking about change, to anticipate it and be ready to bring new productivity to new opportunities. Many of us believe we understand the changes that information technology is bringing to organized society. But I think we are all just beginning to glimpse the consequences, in the United States and all the industrializing world, of information technology’s growing role in the energy economy.

Old businesses and business models, long-standing regional and jurisdictional domains, and traditional economic regulatory systems will be as disrupted in energy as they have been in publishing, Increasingly urban, decentralized models of energy distribution are shifting political and economic power to cities.entertainment and communications; as they are being in medicine and education. For example, for the first time in the U.S, extractors and processors of fuel are now becoming less important to society, politically and economically, than are the industrial and business companies that use electricity and fuel to create products and enterprises that add value to the economy. Furthermore, increasingly urban, decentralized models of energy distribution—made possible by innovations in both information technology and fuel extraction—are shifting political and economic power to cities (and city leaders) and away from the regional energy producers that have traditionally managed the U.S. energy supply.

Decentralized Urban Energy Distribution

The cities’ increased influence over their own energy investments is important because most Americans, and most citizens in the world’s industrial economies, now live in urban societies. Technology developments now make it more economic for most major metropolitan regions to invest within and near their own urban economies, in the distributed generation of electricity, from multiple and often small-scale resources and technology systems—rather than continuing to depend on and pay for the old model of importing electricity from very large remote generating plants.

This increase in the cities’ economic and policy influence over which energy choices to make also has political implications—it means that new decisions about which energy systems to use, and which energy technologies and producers to economically reward for their products, will be made more by regulators and political leaders responsive to the needs of urban economies and to urban energy producers and managers.

At the national level, political influence is following the economic power, shifting rapidly away from the US regions and enterprises that provide primary energy resources, from the states where most energy commodities are produced, to the urban regions and enterprises that pay for and use the energy. Political leaders from those parts of America that are more urban and culturally diverse, less dependent on commodity production, and more focused on manufacturing, technology and complex international business relations, will become more important to national decisions about which energy fuels and technologies to encourage, to subsidize and to tax.

At the state and regional level, influence will shift away from the remote producers of central-station electricity, toward the urban economies making investments in their own diverse, distributed and resilient electricity systems.

Expanded Energy Patch

Many people in the energy business are not focused on these changes in the geographic and sectoral influence of regions within our political economy, because today when energy is the topic, most attention is paid to the national and global impacts of newly recoverable and abundant supplies of U.S. unconventional natural gas and oil.

But this new supply of domestic US energy is actually contributing to the shift in economic and political influence away from traditional energy producing regions and their political representatives—and not just because commodity producers will no longer enjoy the power that comes from perceived energy scarcity in the U.S..

That’s because the energy patch itself has now expanded, to include production of shale gas in Pennsylvania, Ohio, Illinois, West Virginia and perhaps New York, and will include new oil production in California. We should see information technology as the circle that links energy production, energy use, and the management of energy efficiencies.The Southwest, Gulf south, Rocky Mountain and Appalachian fossil fuel producing states, which, with Alaska, have dominated US energy policy for so long, will see their influence diluted as California and the previously declining eastern and midwestern industrial states become important energy producers.

The abundance of American shale gas means that natural gas will displace coal and even some nuclear power in the US electricity industry, which will make solar and wind more economically competitive in electricity markets. The variable nature of solar, wind, and energy created through demand-side management will no longer be treated as unreliable when they are sold into natural gas systems that can easily be made to produce more or less electricity as inputs from solar, wind and demand management supplies vary. Natural gas is the only baseload fuel useful in small-scale generating systems to support distributed solar. The combination of natural gas displacing coal to make electricity, and the trend away from remote power generation toward urban distributed generation, will stimulate greater penetration of solar and wind into the new and more efficient urban electricity infrastructure.

Information Technology, Energy, and the Future

Such rapid innovation in urban electricity systems has surprised even some green thinkers. Those tech investors and environmental leaders who just a few years ago thought that big sun and big wind would replace big oil and coal, that the Mojave Desert and our central prairie states would become our Saudi Arabia of sun and wind, did not understand how the rapid emergence of new technologies would move our economy toward local solar and regional wind in more diverse urban generation, distribution and management of electricity.

Similarly, some investors and environmental groups thought the problems of auto pollution would be solved by turning cars into electrical appliances, plugged into utilities that could sometimes use the cars’ batteries, instead of investing in the utilities’ own storage. Again, rapid technology development in new distributed electricity systems, in integrated urban transportation management, and in automotive design, make the old new ideas less attractive.

We should see information technology as the circle that links energy production, energy use, and the management of energy efficiencies, increasing productivity and saving money and time while reducing pollution. Whether it is combining the most environmentally clean fossil fuel with wind, solar and demand-management energy to make electricity, the integration of automobiles and electricity with urban transportation management, or the implementation of more efficient and resilient urban distributed generation, it is the information technology industry that will manage and connect all the components to create the most productive, secure and environmentally responsible urban energy infrastructure.

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2 Comments

  1. Excellent piece. Right on the mark. The future of energy lies in the investment of distributed generation in our urban environment. This collection and distribution of energy can assist with peaking power demand, blackouts, backup power, remote power and above all, energy security. This is extremely important as the demand for energy increases and temperatures become warmer. What’s more significant is the shift of energy management from remote power plants to small scale distribution. California is working on disrupting the system to fast track solar, and other sunshine states like Florida want to follow suit. The influence and decision making can lie in the hands of local policy makers and urban energy producers. Cities can better manage their energy use, and combined with the investments in smart city technology, they can monitor and adjust their energy consumption. Since small scale generation supports renewable energy like solar, distributed energy can integrate with the growing solar industry in the emerging markets of Latin America. Mexico, Peru and Chile are investing heavily in local solar generation for remote areas. Development is much quicker and requires less legal and political challenges than coal or nuclear, which encompass the construction of large scale power plants and expensive grid infrastucture. Overall, the economic opportunities are huge, and policy makers should recognize the shift that’s already taking form. There’s been a lot discussion on these topics lately in South Florida, given the geographic proximity to Latin America. Two conferences are already being developed in Miami, focusing around the opportunities in Latin America around technology and smart city development, Smart Miami and eMerge Americas.

    Reply
  2. As an ecologist who has spent a number of years looking into America’s energy problem, I find Joe Browder’s article important and innovative. It is entirely consistent with what the data show about the productive capacity, costs, and area required for each energy source, which I review in my book Powering the Future: A Scientist’s Guide to Energy Independence. I mention microgrids—local electrical generation, distribution, and use—but Joe Browder takes this idea creatively much further into the information age, pointing the way to a revolution in electrical energy distribution. I agree his suggestion offers many advantages.

    Several of Browder’s points are worth emphasizing. First, there is a tendency to believe that solar energy can be useful only in very sunny places. But in the mid-2000s, the world’s largest solar power installation was in Bavaria, Germany, near the Alps, hardly known for its benign, sunny climate. Its 10 MW capacity occupied 62 acres. Scaled up to just 3.5% of Germany’s land area, this kind of solar power could have provided all the energy used in Germany—by cars, trucks, trains, manufacturing, everything.

    Based on already installed photovoltaic systems in San Francisco’s Bay Area, one acre covered by a photovoltaic system provides enough electricity for 379 houses. If these same solar photovoltaic devices occupied only 6.5% of the city’s land area, they would have provided all of the city’s domestic electricity needs. Moreover, the costs of solar energy are dropping rapidly, down 40% in the past three years, making solar much more competitive with other energy sources. And the efficiency of sunlight conversion to electricity continues to increase.

    And it has long been known that the fastest devices to come on line during a surge in electrical energy demand surge are small gas turbines, basically airplane jet engines modified and standing on the ground. As Browder makes clear, the new supplies of natural gas make microgrids all the more practical and do away with the oft-used argument that solar and wind can never be reliable sources of energy. It isn’t a question of what is the single best energy source, but what combination of sources, together with the best technology, will be our solution to future energy supply.

    From an ecological/landscape planning perspective, microgrids fit well within the concept of the “garden city,” a term coined in 1902 by Ebenezer Howard. Howard believed that city and countryside should be planned together. A garden city was one that was surrounded by a greenbelt, a belt of parkways, parks, or farmland. The idea was to locate garden cities in a set connected by greenbelts, forming a system of countryside and urban landscapes. Although less well-known today, the idea caught on, and garden cities were planned and developed in Great Britain and the United States, hence Greenbelt, Maryland, just outside Washington, DC.

    More obviously, Browder’s suggestion fits well within the environmental benefits of a move away from current heavy dependence on fossil fuels, and especially away from coal and petroleum, which are the more seriously polluting of these fuels.

    Finally, designing, manufacturing, and installing a microgrid is likely to be easier than trying to turn the existing national grids, originally designed for emergency, into a sophisticated smart grid.

    Browder’s approach is a welcome example of “Think globally, act locally.” We need more of this kind of imaginative, out-of-the box thinking.

    Reply

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