sible for 81% of the energy consumed in the US in 2016. Melting
Arctic ice and rising sea levels may be genuine, critical concerns. Regardless, the economic worries associated with remaking the $18 trillion United States economy aren’t simply
going to be brushed aside, nor will optimistic projections
about the value of going green be assumed to be true. As noted,
oil companies may be willing to take certain steps on their
own. Also, if they’re planning for the long term, as they should
be, they’ll assume a future with regulations that are less friendly
to petroleum. That doesn’t mean they’re going to turn into
Carbon reductions on a grand scale will require extraordinary logistics. In 2015, nearly 68 million US residential consumers used natural gas. Even if every new home built today
and going forward were to rely on renewables, those old homes
have to be fed with gas or retrofitted. How would the latter be
carried out? Taxes paid to the federal or state governments?
Would home owners be responsible? What about transportation? Will commercial airplanes run on lithium-ion
As of 2016, 6. 4 million American jobs were in traditional
energy or energy efficiency, a figure that includes renewables.
Perhaps each one of these can ultimately be a solar, hydropower
or wind role. Let’s not forget however, the related jobs such
as commodity traders and project financiers – or the employees
at software companies such as Allegro. Are those replaced?
The point is it’s far easier to have strong opinions about pollutants than it is to entirely reshape the world’s biggest
Regardless of Paris, coal probably isn’t coming back as a
preferred power-generation source. Realistically, coal-fired
plants are going to be with us for a few more decades – they
can’t be turned off or replaced without an expensive and
detailed plan. Coal in the US still leads to 30% of generation,
and you don’t simply flip a switch to change that. Reworking
those plants, continuing to build new non-coal facilities and
upgrading transmission and delivery infrastructure takes a
great deal of time and a tremendous amount of money.
What it means is coal has some time left. Still, considering
the regulatory efforts and voluntary drives to reduce emissions,
as well as extensive supplies of natural gas and decreasing
costs of renewables, the best days of coal are likely over.
All this said, we can’t ignore the fact that climate-related
efforts are already under way, and others will follow in the
years ahead. In joining the Paris Agreement, the Obama administration vowed to reduce domestic emissions by 26% to
28% below 2005 levels by 2025. As of 2016, US carbon dioxide
emissions related to energy had already declined by 14% since
2005, driven by the increase in natural gas and renewable
energy sources and a drop in coal-fired generation. Meanwhile,
jet fuel consumption is 11% below what it was a decade ago.
That said, transportation-sector emissions overall have edged
upward, with motor fuel being the main contributor.
On the whole though, the US has lowered emissions con-
siderably, even before signing the Paris pact. That’s not enough
for some, but it shouldn’t be minimized, either.
Ultimately, although it’s tempting to focus on the potential
for utterly dire outcomes, the reality we encounter likely will
be much more manageable. There will continue to be efforts
from corporations and regulators to aid the environment. It’s
a guarantee that free-market engineering solutions will emerge.
Government-funded solutions will, as well.
The US departure from the Paris Agreement – which can’t
even happen before November 2020 and which may not even
be permanent – clearly was a disappointment to many. It is
not, however, the end of the world.
ABOUT THE AUTHOR
Michael W. Hinton is the Chief Strategy and Customer Officer at Allegro Development Corp., a
developer of commodity trading and risk management software for companies that buy, sell,
produce, or consume commodities. Headquartered in Dallas, Texas, Allegro has offices in Calgary, Houston, Jakarta, London, Singapore, and Zurich, along
with a global network of partners.
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