Study Tour
Future of Energy Transition and Security
The World Order and Globalization Hub welcomed its final delegation of the year in December, consisting of eight experts in the energy sector, with their collective expertise focusing on energy security and energy policy. The delegation comprised of participants representing Chile, Czechia, Romania, Senegal, Slovakia, South Africa, Sri Lanka, and Tunisia. The delegates included Members of Parliament, Policy Advisors, Engineers, Economists, and Entrepreneurs. The eight-day study tour focused on the state of energy transition, energy security and energy policy in the United States. Delegates visited Washington, D.C. and Houston, Texas for a closer look at the players and factors influencing the energy sector. The group met with various Think Tanks, Policy Advisors, Private Renewable Energy Companies, Academics, Federal Offices, Carbon Capture Startups, The Bureau of Land Management and The World Bank Group.
The delegation spent the initial Sunday in D.C. getting to know one another over introduction presentations. Presentations focused on their background, the state of energy transition, energy security, and the composition of energy production in their home countries. Participants also identified their specific areas of interest within the energy sector and what their hopes were for the future of energy back home. After brief introductions, the group was joined by North America Regional Director, Martin Biesel, for further discussions on the state of energy security in Europe, the clean energy race with China, and the role of market forces on energy transition. The introductory day concluded with a monuments tour of D.C. which provided a detailed historical overview of the city’s origins as the group visited notable landmarks and memorials.
Opinions from the Capitol City
The group hit the ground running on Monday, with meetings in Washington, DC. The questions and topics of discussion raised in DC covered a wide breadth of issues related to energy security, energy transition, climate, and policies therein. Many discussions centered on: predictions for climate and energy related policies under the incoming Trump Administration, the Inflation Reduction Act in practice and predictions on its implementation over the next four years, questions related to energy security and their national security implications, climate change concerns, and the role of the market and economic drivers for energy transition.
Predictions of the Next Administration
A predominant concern addressed by meeting partners across the board in DC is the incoming administration and predictions of their impact on the direction of energy and climate policy for the United States. A resounding consensus from the Capitol city echoed the same sentiment: that the Trump administration will do all they can to rollback restrictions on energy production and change the course of the IRA. Several times, experts opined that the incoming administration at best would take a scalpel, not a sledgehammer to the IRA for a variety of reasons. For the most part, the benefits from the IRA have been felt by traditionally Red States as it has created an influx of clean energy jobs in those States. Therefore, Republican lawmakers have an obligation to listen to their constituents, people who have directly benefited from the IRA, leaving experts hopeful that lawmakers are less likely to put millions of jobs in jeopardy.
Energy as Means of Security
Another pressing question across meetings was the notion of energy security: specifically energy security as means of national security. Participants told first-hand accounts energy dependence on other nations, which elucidated the very real national security threat of energy dependence. A prime concern being Russia - many frame supporting the development of renewable and carbon neutral energy sources as vital to bolstering national security. The dependence of many nations on Russia for energy supply leaves a gap, which can easily be exploited.
Another international element of concern is China and the extent to their involvement and financial investment in infrastructure and mines in Africa. China is rapidly growing their portfolio of renewable energy investments, which could potentially be a concern for businesses and governments alike if they gain a monopoly of the international energy market.
Despite concerns over the incoming administration’s impact on the energy sector, experts and those heading renewable energy companies unanimously predicted that the impending rollback of regulations aimed to support the oil and gas industries, will also help support renewable companies. Many voiced the same opinion, that the market will dictate the growth of businesses. Despite the lack of press on these industries, there is sizable investor interest in developing technologies to diversify energy sources and strengthen the national grid. The climate crisis is upon us; so there is an abundance of incentive, both monetarily and from a national security perspective to strengthen our energy production capabilities.
Lone-Star Start-ups
The group traveled to Houston on Wednesday to continue discussions on energy transition and security. For the second half of the program, the group met with various energy experts and visited start-ups around Houston. This half of the program was in partnership with the German American Chamber of Commerce. While in Houston, the group met with associates from the Greater Houston Partnership, Syzygy Labs, Greentown Labs, Rice University, Mars Materials, Carbon Sequestration Inc., Houston Energy Transition Initiative, and the Houston City Council.
Houston, the self-proclaimed energy capital of the world boasts its central role in the energy market. The State strategically positions itself as a haven for start-up businesses. The more relaxed government regulations for businesses, coupled with the fortunate landscape and natural resources of the State, lend Texas the perfect hand to be an energy hub. Some of the starts-ups the group visited tried to get their footing in another tech friendly State like California, however high costs and tighter regulations limited the mobility of the business to get off the ground.
The emphasis on innovation in the State cannot be understated; in Houston alone, there is a plethora of tech incubators specifically for clean energy, carbon capture, and climate related technology companies. The energy and related technology market has such a broad range of needs that start-ups are not vying for the same specific point of entry. The competition rather, is from within the companies to create a superior product and grow their business out of the start-up stage. Experts elucidated that these start-up companies and the Labs that support them provide vital tools for collaboration and ultimately success. The healthy amount of competition, ample amount of small business support and the abundance of investor interest, creates a perfect environment for these climate and clean energy businesses to thrive.
Natural Capital
The natural resources of the State lend a helping hand in making Houston the energy capital of the world. Multiple experts in the State pointed to the various natural resources and their benefits. For example, in the Northwestern part of the State there is expansive amounts of land where very few people live, which also has an abundance of sunshine and wind. This has led to wind and solar farms setting up shop in that area of the State. Additionally, to the east of Houston, the clay and natural floor of the forests create the perfect conditions for carbon capture. One can bury natural materials like wood, rather than burning scraps en masse without releasing harmful gases into the atmosphere. The dense, impermeable nature of the clay makes these carbon capture companies successful. Furthermore, the State still possess a stronghold on oil reserves and largescale refinery infrastructure to process their cache of fossil fuels.
The Problem with Transmission
The growing number of sources and means of production of energy for the grid is step in the right direction; however, it is meaningless if the energy cannot reach people. The complex issue of energy transmission was a topic covered by experts across the trip. There are several main points of concern. First is the consistency of renewable energy. These sources are weather dependent, so sole reliance on inconsistent means is not feasible. An element of the puzzle that further complicates the transition to renewables is the inability to store energy captured through wind and solar and transfer it when there is demand. This creates the issue of wasting energy.
Moreover, experts have plainly run into the issue of getting energy to people. Solar and wind farms are effective at collecting energy from their intended source, however these farms for the most part are built in extremely rural locations. The issue then becomes getting power to people, as transmission lines are time consuming, require a multitude of permits, and are expensive to build. The lines are not always conveniently located for renewable projects to tap into, which diminishes the efficacy of these projects. It becomes a catch-22 of sorts, wherein there is no incentive to build transmission lines if there is not going to be an energy source to tap into, and there is no incentive to build a wind or solar farm if there is no viable way to get the energy to customers.
Business as Usual
The sentiment in Texas toward climate change and the role of businesses took a similar tone to what experts in Washington, D.C. expressed. The market will be effective in supporting and growing clean energy, green energy, carbon capture, and climate related technology businesses. There is equal monetary capital gain interest in the oil and gas sector as there is to the renewable energy sector in the State. Qualms over the incoming administration and their potential effect on climate initiatives is felt to a lesser extent in the State, because if anything, the predicted loosening of restrictions and permitting will equally benefit the renewable sector.
Conclusion
The issue of energy transition and security unfortunately does not come with a singular magical solution. The most simplified answer is to diversify energy sources and continue to invest in climate friendly technologies. Experts iterated across the week that energy security is vital to national security. Many remained hopeful that the market will help mitigate the climate crisis. Renewable energy businesses, carbon capture companies, and emerging climate friendly technology companies are lucrative and have plenty of room to be successful in the market. In sum, the issue encompasses many sectors and collaboration is encouraged. Experts are looking to the future with cautious optimism.