America will become the largest producer of energy in the world by 2020. We are already on our way to achieving our goal. Some energy solutions will cost more but be more efficient. Some will cost less and provide useful benefits. Some solutions will look the same as today’s solutions while others have not been invented yet. We will accelerate Moore’s Law and experience leaps of innovation every year. Businesses and consumers will have a chance to choose the energy solutions that are most effective for them and some costs will ultimately fall.
During the 40’s, the United States of America was the largest producer of energy in the world. Energy was cheap and abundant in America. Over the next few decades, we invested heavily in ensuring other nations developed their oil reserves and the price of energy continued to fall. We had the option to extract and refine at home and/or import from other sources and still refine and distribute at home. Exporting energy fell from favor as a business model. Energy consumption increased but eventually consumer costs began to increase. However, many continued to reap substantial profits off of the ever increasing cost of energy at the consumer level. Every dollar of profit realized came directly from each and every American – which is exactly how capitalism works. I have no problem with the system but eventually the consumer and business people are going to start wondering how they seem to be directly financing a profitable industry without ever receiving a positive financial return on their investment. One day they are going to get motivated and do something to get a better return for themselves.
During the decades of the 70’s through the 2000’s, we were forced to acknowledge a simple truth, we are using much more energy than we are creating and the imbalance is making us less competitive, costing more money and creating long-term damage to our way of life. Something had to be done.
Yet we were constantly challenged by the undertakers – those entities seemingly focused on killing every good idea in order to keep exactly what they already control.
Last week a fire occurred at a Chevron refinery in Northern California. Within 3 days, retail gas prices in California increased by 30 cents at every-single gas station in California. How can a business person or a consumer plan for this kind of financial surge just because the gas industry is so inefficient and their production level so strained that one fire at one plant can increase the cost of doing business in California by $100 million in a week? How is it possible that there is no refining capacity to handle production issues at one plant without putting the entire system at such risk. How can prices shoot up immediately at retailers that did not even experience the fire or loss of production? Talk about a massive transfer of wealth. How stupid can our state (we-the-people) be to rely on one form of energy and one distribution system to power gigantic sections of our economy like vehicles? How careless can we be to allow a market blip to impact every person in the state. Why do I feel like such a sucker? Fires happen and people have insurance to cover losses. Why am I paying for their fire as a consumer at the pump yet when the insurance claims pay off, receiving no rebate? Well the answer is even more simple, I ( we) never bothered to buy any insurance to mitigate this risk. What to do now?
Well, the days of being held hostage to any single industry are coming to a close as more and more energy options come on-line. Options for energy solutions are the new insurance-policy against market wrecking reliance on one solution. In the near future -2020 – when the options are fully implemented, a fire will occur at a refinery and it will not result in an system-wide increase of one thin dime to many consumers. Consumers will simply switch to one of their other energy options that did not incur a major event. I can see how we will be a better economy as a result.
Today we are telling the undertakers to move out of the way – stop standing in the way of progress. The sustainable movement has significantly elevated the dialogue and we have turned the worm. We are now a nation quietly experiencing a revolutionary R&D and manufacturing movement within the business community and consumers are reaping the benefits. I want to be clear that I am not talking about the green-movement from the tree-hugging perspective, which I frankly support. I am talking about the green-back version of green – real dollar bills. I am talking about the ROI, Return on net assets, cost reductions, and net revenue opportunities being realized by those taking advantage of the sustainable movement. I’m a green capitalist and there is money to be made and saved in this industry.
If you have a business or live in a home and require instant access to our modern conveniences, you’re going to need energy. Yet, energy and water costs rise 7% per year. Energy and water are an unfunded liability to every business. For decades no one paid attention to the sucking sound of profits going down the drain … literally. You negotiated a financing agreement with a payment plan for your mortgage, rent, equipment, etc. but not your energy. You have few surprises related to those specific liabilities which you have mitigated -but not the liabilities related to energy/water/space utilization. One power outage and your business goes back to the stone-age. You have built a plan to run your business with some certainty for many things but not anything related to EWS ( energy, water, space). Yet your only plan for addressing the ever increasing cost of energy is to turn the lights off or just pay the bill every month. This makes no sense and is no way to run a modern American business. If you are not doing something to mitigate energy cost, you’re not going to be successful or competitive. You need options and a plan.
Well my friends, this consumer need sounds like American consumers are ringing the demand dinner bell and the business community is ready to eat. American industry has risen to the occasion. Consumer demand for energy has driven new R&D solutions and their solutions are hitting the market rapidly. Businesses are adopting these new energy solutions and lowering energy and water costs … forever -therefore effectively financing their long-term energy liability once and for all. This is not pie-in-the-sky stuff. Let me share some local specifics:
1. San Diego produces more on-site solar energy than any other city.
2. California has more wind turbines on-line than any other state.
3. Private-companies from all over the world are setting up shop San Diego and Tijuana (our Mega-region) to meet our demands for energy -and they are specifically producing sustainable energy. One manufacturing company just opened in August and hired 300 new San Diego employees.
4. The oil industry is reinvesting in more efficient drilling and refining methods.
5. The natural gas industry is exploding and we are closer than every to a national strategy of natural gas distributed fueling stations for our entire transportation system. T. Boone Pickens, a San Diego resident, must be smiling.
6. System-wide water use in San Diego County is down by 25% as a result of conservation and new equipment integration that will continue the savings regardless of consumer behavior.
7. A San Diego company has developed a way to refine algae to vehicle fuel for under $1.90 per gallon. Once they hit $1.25 per gallon, they can compete with fossil fuel based gasoline.
8. Energy saving products are everywhere and their elevated use is driving down manufacturing costs and retail costs.
9. Tesla Motors repurposed a closed General Motors plant to build a new high-end electric car (Model S) with a battery range of 300 miles and a sell price under $60k. This car directly competes against high-end $60k brands like BMW, Audi, and Mercedes and though not the car for the masses, still a car that can compete for a very sought-after market. We love our European cars in California and the Model S is a very good looking vehicle that just happened to be electric. Solar panel kits will charge the vehicle at home and at work. The San Diego pre-order list is huge.
10. Liquid Natural Gas terminals are now on-line in Ensenada with another coming to California.
11. Community-based sustainable energy production is cost-effective and neighborhoods are now becoming their own utilities without fossil fuel distribution.
12. Solar panels are charging electric vehicles.
13. Hydrogen Fuel cell systems are now powering grocery stores and data centers.
14. Subsidies are ending yet demand is still increasing.
15. The US military bases in San Diego has reduced energy, water, and waste by double-digits in each of the last 5 years by adopting aggressive sustainable solutions.
16. Our local utility just brought the Sunrise Powerlink online which imports alternative energy from the County just south of San Diego. You may not know this but our nuclear power plant experienced a failure and was shut down. We lost 800 mega-watts of power to the San Diego region just as summer was about to hit. Under the old way, brown-outs and energy rationing would be required -damaging our local economy. However because we invested in the Sunrise Powerlink and the link is on-line, we were able to replace the lost nuclear production without impacting our economy. Once the nuclear plant comes online, we will finally have reasonable excess capacity to handle future shock. By combining energy conservation, efficient equipment, and reserve capacity, we now have a new insurance policy to address demand in our region.
17. Companies are keeping more of their money.
18. Companies are implementing collaborative office interiors and experiencing outstanding space savings and lower occupancy expense.
19. Geothermal energy production has increased by double-digits.
20. Last week The County of San Diego approved development of the largest wind farm in San Diego County history.
And I am only talking about San Diego results, not some ideologue’s mythology or wide-eyed tree hugging quest. We are directly and specifically experiencing the benefits associated with energy-centric innovation. The rest of the state as well as the nation can recite similar results. In spite of skepticism, we’re already ahead of the curve and on the right track as a nation.
Consumers have broad options now and can tailor multiple solutions to their specific needs. It’s awe inspiring because you can see the opportunities for commerce and a more efficient economy. Communities adopting these strategies will eventually be more competitive than others and therefore much more successful over a longer period. Consumers are now seeing faster returns in their investments in energy, water and space savings solutions. This is all good for business.
In the past we imported energy solutions like wind turbines, solar panels, etc. The blades, turbines , and panels were made elsewhere. The research and manufacturing jobs created elsewhere. This fact should surprise no one since it is clear other countries adopted the need for alternative energy solutions much earlier than we did. Even after the oil embargo of the 70’s, we let ourselves fall back into energy apathy. China has demand for coal, natural gas, nuclear, solar and every other energy solution possible to fuel their growth. Of course their manufacturing jobs are gong to occur on their soil. Europe has similar requirements and has been well ahead of us for some time. In some cases, we actually created the energy solutions but since there was no demand in our country -(due to the successful work of the undertakers) – US companies abandoned these solutions and other countries picked up the ball. Then they sold these solution back to us. Good for them – expensive for us.
That was the past and now we are back in the game. Today, American companies are designing, engineering, manufacturing, and selling a variety of energy options. We are developing backward-compatible electronic energy management systems that can measure and monitor like never before. We employ new R&D investments strategies and work more efficiently because nature has already given us the solution to the challenge. Solutions are coming faster than ever before. Demand is still growing and we as a nation are seeing the benefits.
Today, America is the third largest oil producing nation. You would never know this by listening to the undertakers. We are even exporting more energy than ever before. Our private-sector energy companies are doing better than ever and generating outstanding profits. We are fracking natural gas like never before and states like North Dakota have unemployment rates of near zero. Wait until California adopts safe fracking standards. America has an all-of-above energy strategy as evidenced by the fact that we are literally using all-of-the-above. We are researching even more unique energy solutions and manufacturing is increasing . Existing energy companies are developing alternatives as well as others from other industries. Some of our entrepreneurs have failed, others succeeding. Demand for alternatives is up and consumers are looking for the best solutions. Our nation still demands more energy than any other country so it is no coincidence that we can support a vibrant alternative energy economy. Our private-sector is meeting the demand and Americans are benefiting.
By 2020 we will be the largest producer of energy in the world.
Bully for us.