A.G. Gancarski
“Opportunities and obstacles” define the near term future of the Florida energy sector, according to Christopher Guith, the keynote speaker of the Florida Energy Summit, who is senior VP for energy at the US Chamber of Commerce’s Institute for 21st century energy.
Opportunities, he told FloridaPolitics.com in an interview before his speech on Thursday, include a “massive resource base” for natural gas, which was not possible ten years ago.
Spurred by “entrepreneurial creativity,” the question among business leaders is one of how to add value to that.
Florida is the launch pad for a lot of innovation. The Gulf Coast already has the infrastructure; however, NE Florida has a “long term opportunity.”
Natural gas, for many, is seen as something used just to “cook pasta.” Yet for forward thinking business types, such as those with large commercial fleets, the move has been made.
“The technology is there,” Guith says, as “almost all vehicle manufacturers have CNG vehicles.”
But price point, coupled with the availability of CNG, is the issue.
It’s one that ultimately is determined by state policy and consumer marketing.
Natural gas prices are down, along with petroleum prices, a function, Guith says, of “all the same companies in the space.”
Communities like Jacksonville, “isolated from the source” of natural gas production, are demonstrating “foresight” by moving forward with initiatives like CNG stations.
Yet Jacksonville is not alone.
The new technology is all over the country.
Energy security and independence has been fostered, Guith says, by the doubling of domestic oil production since 2006, a trend which has allowed the strengthening of soft power initiatives like the Iranian oil embargo, which cut their exports by 80%.
“Every day that went by,” Guith related, “less and less was needed from the global market.”
Florida, Guith affirmed, has been at the forefront, showing “ways to take advantage of American ingenuity without raising costs.”
Of course, there are still issues, such as JEA’s bet on a coal-fired power plant, a move which put the Jacksonville utility at loggerheads with the EPA.
Though the Supreme Court possibly could reverse the policy in the coming years, by the time that happens, “the toothpaste will be all over the bathroom.”
However, for JEA and other coal exponents, there is a glimmer of hope.
“The EPA has been timid in triggering” implementation of the policy, by not publishing it in the Federal Register, Guith related before his speech.
Meanwhile… the speech itself.
Guith offered an overview of a “very interesting time” related to energy policy.
Energy demand is expected to increase 56 percent by 2040, the bulk of that (90 percent) from the developing world. Electricity demand: 76 percent.
$38 trillion of energy infrastructure is expected to be needed to facilitate that.
“Leaders of those regions that don’t have electricity,” Guith said, “are motivated to bring it to the masses.”
For most of the world, the path of least resistance is the bete noire of US environmental types: King Coal.
American energy demand is expected to rise at a more modest level: 9 percent by 2040.
“You have to appreciate how large the American energy economy is,” Guith said.
Luckily, America has tremendous reserves, including 206 years of oil and 464 years of coal that are “technically recoverable.”
Meanwhile, 536 years of oil and 9,844 years of coal are “in place,” which is to say they are there, but technology has not allowed its extraction.
“We have the largest energy resource base in the world,” says Guith, even exceeding Russia, and “we can use it as an economic driver and a force for geopolitical good,” he added.
All this, and 86 percent of our Continental Shelf is inaccessible.
Still, crude production is up 84 percent since 2006. The increase last year is the biggest in history. US refinery output, likewise, is at record levels.
“This has happened so fast, and in so many new areas… that we haven’t had the infrastructure to keep up with production,” Guith relates, which has led to a staggering increase of 4000 percent crude transport by rail from 2008 to 2014.
“Regulators are still trying to catch up to [demand],” said Guith.
Currently, we’re getting more Canadian oil, and less reliant on overseas imports. This as global production exceeds demand, right now, by 2.6 million barrels a day.
“American innovation almost doubled production, and created a market glut,” said Guith.
Market gluts have consequences, including a drop in oil and gas rigs.
“Has global demand peaked? Ultimately, we don’t know the answer, but it certainly looks like it has,” Guith says.
“If that is the case, then we’re going to see the price of oil go back up,” Guith added, pointing out the “erraticism” in the stock market being related to oil market fluctuations.
Exports, he added, may be a way forward, triggering a decline in gas prices, up to 394,000 new jobs, and $1.3 trillion in governmental revenue.
Guith also addressed coal, saying that “we are betting the entire future” on an ability to use coal without emissions, in retiring coal fired generators, such as the one used by JEA.
Coal’s advantage, he said, is “predictability.”
Guith then addressed “lost opportunities” from the EPA Clean Power Plan, which eschews nuclear and natural gas contributions, and which does not involve “global reciprocity,” putting the US at a self-imposed competitive disadvantage.
“Pushing coal out, not producing nuclear,” Guith said, “takes away from the diversity that makes America’s electricity backbone so cheap and reliable.”
