I’ve advocated for smart, sensible energy policies in our country, and state for close to a decade as a national spokesperson for the oil and gas industry. We focused on 11 different states targeting lawmakers, local elected officials, business owners, community activists and grass top leaders who may not understand the facts behind controversial extraction methods such as hydraulic fracturing or more popularly known as “fracking”.
Coastal leaders recognize me as a proponent for expanding offshore energy production, specifically tapping oil and natural gas reserves prohibited from development in the Atlantic OCS. So needless to say, my voice is rarely heard in the renewables universe, but I believe it’s far more important to be an “energy advocate” and not just an advocate for a source(s) of energy.
A recent article in the Wall Street Journal addressed a brewing debate in North Carolina regarding GOP leaders in the General Assembly staking out a hard line position against wind energy. The first wind farm in the state, a $400 million utility scale wind farm with 104 turbines located in Eastern North Carolina, provides electricity to a nearby Amazon data center – the company like many others made a social commitment to source energy from renewables.
The project created a minimal amount of permanent jobs, 17 according to reports, but it provides revenue to local governments and farmers in a region still undergoing an economic reformation. Massive job losses in textiles have left many rural areas severely behind compared to urban regions. Undoubtedly most corporate headquarters or manufacturers are not seeking to relocate to Pasquotank and Perquimans County – so economic development in any form is welcomed.
Wind and Solar
Wind and solar energy are disrupting a century old model for transmitting electricity where barriers to entry can be high and the gates carefully guarded by a mix of industry and government interests. Energy development is strikingly similar to economic development; it comes in many shapes and sizes. Can you imagine a community or state targeting one source for jobs, revenue and investment? Likewise there is no reason we should restrain viable energy resources that can power homes, businesses and create good paying jobs.
I routinely caution elected leaders not to have a limited paradigm; we must focus on a balanced “all of the above” strategy with market forces centrally in mind when crafting energy policy. Utilizing a portfolio approach to sourcing energy is not only smart, but it allows for versatility and incremental steps toward less reliance on fossil fuels – which must be a slow careful process with substantive input from consumers, government and industry.
State lawmakers argue the federal subsidies afforded to wind farms is the reason for pause, but the government provides tax credits for the rehabilitation of historic properties and textile mills, we pursue companies with a mixed bag of financial incentives hoping to lure in new jobs – in my opinion all smart investments – but there should be no hypocritical objection to using subsidies for infrastructure development that benefit long-term energy security.
Consider renewables now provide 15% of the nation’s power supply compared to around 10% in 2008. Government subsidies and a range of financial incentives drove most of the growth, but if our government is going to make long range capital investments, then I can’t think of a much better option than shoring up our energy resources. Keep in mind energy security equates to national, fiscal and economic security.
Fossil Fuels Still in Demand
I testified at a Federal Energy Regulatory Commission hearing in support of the Atlantic Coast Pipeline, a multi-state infrastructure project for the distribution of natural gas. Thoughtful infrastructure projects attract significant capital investment, jump start job growth, and increase local revenue to support critical services while aiding communities transitioning into a new economic reality.
Not to mention, fossil fuels remain in high demand and must be expanded, they provide 80% of the energy demand globally. If we decided to rid the world of fossil fuels, then it would cost $20 Trillion to upgrade the infrastructure and the project would possibly be completed around 2035. However more investment into aging transmission infrastructure and seeking ways to build in storage capacity will go a long way to overcoming the intermittent issues with consumers sourcing solar and wind energy for electricity needs.
The Wall Street Journal article framed the debate as “rural Republicans” against out of touch beltway Republicans in Raleigh, but I’ve long argued energy policy cannot be distilled down to such a basic dichotomy. It’s much more complex involving a wide range of constituencies and real lives at the center. Only an “all of the above” strategy will prove effective.
Algenon Cash is the managing director of Wharton Gladden & Company, an investment banking firm, he is also a national spokesperson for the oil and natural gas industry. Reach him at acash@whartongladden.com.
