Obama’s New Energy Economy Relies On Renewables And Natural Gas

President Obama’s glide through the lower chamber on his way to deliver his final State of the Union differed from his very first one seven years ago. In 2009, he was imbued with a confidence and a spirit — one to carry out his message of “Change We Need.” On Tuesday evening, he was self-assured, albeit weathered.

Regardless of what one may think, the president has taken decisive positions that will leave a mark on the nation, perhaps most notably in the energy and the environmental areas. Indeed, it has been Mr. Obama’s original economic stimulus into the New Energy Economy that started things off — the more than $1 trillion invested into green energy technologies and the smart grid, all intended to create economies of scale and new job opportunities.

“Seven years ago, we made the single biggest investment in clean energy in our history,” the president said during his State of the Union. “In fields from Iowa to Texas, wind power is now cheaper than dirtier, conventional power. On rooftops from Arizona to New York, solar is saving Americans tens of millions of dollars a year on their energy bills, and employs more Americans than coal …”

To this end, the solar industry employs nearly 174,000 in this country — people who are provided a living wage, says the The Solar Foundation. Traditional utilities like Southern Co., NextEra Energy and NRG Energy are leaders, in addition to SolarCity Corp. and First Solar Inc. Meantime, the American Wind Energy Association puts the number of wind-related jobs here at 73,000, and growing.

And globally, the numbers are even more stunning: An estimated 2.3 million people worldwide currently work either directly in renewables or indirectly in supplier industries, says World Watch Institute. Around 800,000 people are working in solar-related businesses, it notes, adding that 300,000 are employed in wind-related firms, all globally — and mostly open to U.S. entrepreneurs.

Context is important: In the fall of 2008, major investment banks that had been lynchpins of the global economy had bellied up while the Dow Jones Industrial average had watched the floor crater beneath it. The U.S. jobless rate reached 10 percent, and it now it hovers at around 5 percent.

While the U.S. Federal Reserve Board pumped money into the economy by reducing interest rates to near zero percent, companies and consumers nevertheless felt compelled to tighten their belts. The malaise subsequently spread around the globe. Although the U.S. officially recovered in 2010, the pall from the Great Recession has not completely dissipated.

To be sure, skeptics have said that the Obama administration’s positions on energy economics — and especially his stimulus plan — interfere with private markets. Calling his initiatives giant make-work programs, his critics say that they have caused capital to flow to where it would not naturally extend. Wage growth, they add, is stale while the American psyche is still wounded.

Even though the president believes his economic policy is the winning formula, there have no doubt been losers: coal and the people of the major coal producing regions, who have yet to see any ripple effect from the green energy wave. Indeed 40,000 coal jobs have been lost since 2008, says the National Mining Association, all tied to the bankruptcies of the major coal producers; On Monday, Arch Coal filed for Chapter, joining Alpha Natural Resources, Patriot Coal and Walter Energy, that also declared bankruptcy in 2015.

The stimulus may have triggered an expansion in renewables. But it has been new regulations that have choked off coal production, along with cheap natural gas.

As such, there’s been a clamp down on all types of pollutants, like mercury, sulfur dioxide, nitrogen dioxide and carbon dioxide, which most climate scientists say traps heat in the atmosphere. Coal, in fact, is responsible for a third of all man-made carbon emissions while it releases more pollutants than competing electric generation fuel options.

“Now we’ve got to accelerate the transition away from dirty energy,” the president said. “Rather than subsidize the past, we should invest in the future – especially in communities that rely on fossil fuels.”

Ironically, the re-awakening of the U.S. economy has been less about public investment in renewable fuels and more about private investment in shale gas development that has led to new capital formation. And there will be 930,000 shale-gas driven jobs by 2030 and 1.4 million by 2040, says PriceWaterHouseCoopers.

To the surprise of many, it has been President Obama and his environmental regulators who have given shale gas its biggest jolt — a fuel that the administration labels as a bridge to the future, when the country could rely exclusively on green energies and energy saving technologies. Natural gas, or its unconventional counterpart shale gas, is replacing coal and helping the administration meet its goal of a 32 percent cut in carbon emissions by 2032.

Not only is the fuel used to feed electric generators. But it is also used in the chemical and manufacturing processes: Natural gas liquids – ethane, propane, butane, and others – are split off and used as valuable feedstocks to create products for everyday use before getting exported all around the world.

There’s at least 2,515 trillion cubic feet of proven natural gas reserves, amounting to a century’s worth, according to the Potential Gas Committee. Prices are now $2.35 per million Btus – much less than what the Europeans or Asians are paying.

The American manufacturing and chemical industries are thriving as a result, while their foreign counterparts are investing billions here as well. Witness the rebirth of petrochemical plants all over this country — the equivalent of $258 billion in new manufacturing output by 2020 and $328 billion by 2025, says the American Chemistry Council.

Like all commodities, natural gas prices will rise and fall, only to rise again because of the expected increase in demand. Despite the ebbs and flows, it should remain in favor for years to come.

To some, though, natural gas is no panacea. The Sierra Club, for example, is intent on getting past coal but it does not see natural gas as a solution to the carbon problem. Pointing to the International Energy Agency’s studies, it says that such a strategy will still result in temperature rises of 3.5 degrees Celsius by century’s end — far more than the 1.5 degrees-2 degrees Celsius limit set by the COP21 climate accord in Paris in December.

Somehow, world leaders – present and future – have to reconcile the economic growth with the ecological footprint. Full transparency and closer oversight are a start. And, to the chagrin of some, public investments in modern energy technologies are also vital, and will advance the ball even further.

President Obama’s energy and environmental legacy has largely been about the tale of two fuel forms that have dovetailed during his time in office: renewable power and shale gas. While some will question this confluence, the connection is real: The White House has focused on investments in the New Energy Economy, defined broadly as not just renewable technologies but also cleaner fossil fuels.

“Anyone claiming that America’s economy is in decline is peddling fiction,” Obama said.

While America’s most recent energy course can be nuanced and dissected, the president has kept his promises and changed the nation’s energy direction. Whether that is good or bad is matter of interpretation. But we can say that the U.S, generally, has emerged from the dark halls of recession and into the sunshine – with potentially better prospects, both ecologically and economically.

Forbes