Monday, July 20, 2009

Don't Count Out Alt-Energy Just Yet

I've been reading a bunch of articles lately that have the undertone that alternative energy, specifically wind and solar, are dead with the decrease in natural gas prices (most recently: Energy Business Daily - an article from which I learned the word "ablactate" which is a pompous way to say "wean"). The key fact that most people have seized upon is the postponement/death of T. Boone Pickens' plans for a giant west Texas wind farm.

This news bit makes convenient headlines today, but I don't think the media is probing deeply enough. Maybe it's the cute headlines, "Tilting at Windmills" or "Blowing in the Wind" that makes it a popular story. The article cited above does acknowledge the calamity in the financial markets, noting that access to capital has been difficult over the past year, and most large scale alternative energy projects are capital intensive. The article notes that many of the financial institutions that supported alternative energy projects have been "side swiped by the financial crisis." I'd say instead they've been T-boned by it. But this is a temporary condition.

Alternative energy isn't going to die any time soon. Our energy future lies in a "portfolio approach," with wind and solar key parts of it. The energy sources will be regionally appropriate, i.e. wind works much better in the West than it does in the Southeast and solar works much better in the Southwest than the Northeast. But ultimately the "carbon light" energy sources (including natural gas) will come to dominate the energy picture in this country.

The technology, especially for solar, continues to evolve. We are going to see numerous "game changers" in the next couple of decades that will alter the course of our energy future. Over the past year, technological advances and good old trial and error have led to the shale gas boom in North America that has made trillions of cubic feet of gas commercially obtainable. Don't think it stops there. These are exciting times for the energy industry.

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