Solar Energy Market
While the United States ramps up oil and gas extraction and production, aiming to be a net exporter of fossil fuels by 2030, the oil-soaked sheikhdom of Saudi Arabia, and other regional powers, are pursuing a complete role reversal by pushing aggressively into the solar energy market.
Sunset of Oil, Rise of Solar
Middle Eastern oil kingdoms, such as Saudi Arabia, have the most to lose from declining oil reserves, and therefore incentives to play the long game and to stay two steps ahead of the rest of the world on energy policy. Countries play to their strengths, or at least that’s what economists consider the ideal dynamic between nations in the world economy. When it comes to energy, geopolitical entities blessed with an abundance of resources will almost always exploit those resources in order to benefit their economy and their people – there’s nothing wrong with that. For Saudi Arabia, that means two things: oil and sun. It doesn’t take a rocket scientist to figure out that with oil output in decline, the sheikhdom’s best bet for remaining a global energy player is in the solar energy market – solar power. They know that, and they are pushing hard to realize that goal.
Resurgence of Oil & Gas Puts Renewables at Risk
America’s situation is considerably more complicated. While Saudi Arabia may very well have no choice about the direction its energy policy must take, the United States will have to decide how to best balance increasing output of fossil fuels while still retaining a competitive lead in the cleantech sector – a precarious balance. Without a doubt, the oil and gas boom have been an economic windfall for many areas of the nation still struggling to recover from the recession. The danger, is that with this temporary flux of cheap fuels, the nation will once again lose sight of the importance of continuing to invest in and develop renewable technologies. In fact, reports indicate that investment in America’s renewable sector for 2013 will take a dive, as private investors burned by Chinese competition pull out, and government support wanes.
The danger here is that with all the hullabaloo about oil and gas and making America a net exporter by 2030, we could lose sight of the nation’s hard-earned competitive advantage in cleantech. In 2010, three countries topped the charts in cleantech innovation – Japan, Germany, and the United States. No other countries came close in terms of innovation. From an economist’s standpoint, to neglect to nurture that competitive advantage would be a huge disfavor to the people of America. Remember, that even during the midst of the Great Recession, the green sector continued to grow, add jobs, and innovate even as other industries curled up and died. As the oil and gas sector starts to heat up again, let us not simply push the solar energy market aside in favor of returning to the old status quo.
From Whale Oil to Solar Panels
America has traditionally dominated the energy markets of the world from exporting whale oil to coal and conventional oil during the early years of the oil age. We again have that opportunity with the solar energy market. For now, the looming question regarding energy in the twenty first century remains: How will America transition away from carbon-based fuels, such as oil and natural gas, which are essentially a finite resource? And just as importantly, how will we do so in a competitive way that maintains America’s traditional dominance in the energy scene? The Solar Energy Market
As mentioned in the article “An Expiration Date For Our Current Energy Policy Model?”, economically extractable oil and gas will come to an end one day. Whether that day is twenty, fifty, or a hundred years down the line is up for debate, but there is a countdown to zero by which time the U.S and the rest of the world will have to have already moved on to other energy sources. At that point, the dominant energy leaders of the world will be the nations that played the long game, that innovated with an eye towards the future. In regards to the United States, exploiting and leveraging current fossil fuel resources, and aggressively investing in renewables, is not mutually exclusive. We can do it. we just have to make sure we do it in a way that does not sacrifice future competitiveness for current gains.
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