There is a national debate going on about energy and how we get it. Cost, safety, reliability, and “energy independence” are all being discussed. All of this impacts the companies we work for and our home supply, as well. Grand debates are being held (“Drill, baby, drill!”) concerning energy usage and climate change, about the Keystone Pipeline and about fracking. What are the issues when it comes to energy flexibility and risk and how do they affect us?

Lately, there has been growth in demand for energy and, thus, we need to determine how we will derive it. In addition, there are global changes as a number of developing countries are experiencing growth. Well over a billion people worldwide over the next few decades will enter the middle class, increasing energy demand. This is not an abstract concept. China is opening several new large power plants every year and there are many stories of cities being electrified for the first time, people trading in their bicycles for their first cars, and people buying their first TVs, computers, etc. This demand will affect us. World demand influences the sources of our energy and the price we pay.

And at the same time, we are beginning to see the initial effects of climate change, of the increased heat in our atmosphere due to enhanced trapping of radiation by higher concentrations of CO2 from greater combustion of fossil fuels. Scientists tell us we can still avoid most of the major impacts of climate change if we can reduce GHG emissions by 70% from a 1990 baseline (which we exceed) by 2050. How can we achieve this and also meet the growing energy demands of over 1 billion people projected to be high energy users by 2050? What does this mean for us and for our economy and companies striving to maintain and grow?

We need to examine different sources of energy: natural gas, oil, coal, nuclear, renewable power. One thing that is important to accept is that all energy sources come with risk. I am old enough to remember as a child an old TV show, “Beverly Hillbillies”. Jed Clampett shoots at some wild turkey, misses, and up from the ground comes crude oil. Just like that. That was an exaggeration even then, and is quite far from the truth now. We are digging for gas and oil in unusual, faraway places and in expensive ways resulting in calamities like BP Deepwater Horizon (digging way out in the Gulf of Mexico). And fracking (natural gas from shale) has risks in terms of water usage, land use, contamination. Some want to ban it because of these risks. Good, but what would take its place? Is it better to use coal or oil (accident risks, higher CO2 emissions) instead? Nuclear emits no GHG emissions. But in what town could we build a new nuclear plant? Renewable power is clean and effective (I have solar panels on my house). But how do we store and supply power for night time or cloudy days or peak power demands? How do we get power from mostly desolate windy areas to the cities that need it?

There is no simple answer to energy. We want our energy and life styles and our company’s operations to continue smoothly, but we need to now accept and address many risks in order to attain our and the world’s energy demands.

An answer is support for technology and smart regulations. Many of the energy items mentioned are new (digging deep in the Gulf, extracting from shale or sands, renewables). Improved technology and procedures can at least reduce risk (though probably never eliminate risk) while obtaining energy. Research and development for this must be encouraged. Similarly, smart rules should force companies to address risk (particularly if it endangers human life) while encouraging the development of the energy source. For example, companies can be allowed to frack only if it has demonstrated the proper safeguards to protect watersheds, treat wastewater, and protect land that otherwise would harm us and cost our society quite a lot to remediate, too.

So, the best approach for a municipality and a company is to have a formal energy program maximizing fuel flexibility, as risk and cost will change over time. Companies should design facilities that can use multiple sources of energy. For example, besides using the local utility’s electricity, a facility should also look to install renewable of cogen to develop one’s own source of electricity. Steam or hot water systems should be able to use multiple fuel types providing surety and flexibility as availability and price become issues. The cost of energy is now recognized as a major cost center for many municipalities and companies. But without power, heat, or steam, then functionality and production can shut down altogether, having grave impacts on its very being. Energy flexibility is important to look at seriously now and to plan for and execute toward in the future.

And a big part of any such program should also be energy conservation. A great way to be more flexible is to require less energy to perform your functions, giving you more flexibility to find energy sources. To achieve this, energy audits should be conducted routinely. There has been a revolution in energy saving technologies in just the last few years that are implementable and do work. Conducting an energy audit to determine new effective strategies to reduce energy use and actually implementing them every few years will help you both reduce energy costs and become more flexible to future market changes, as well.

CCES and our experts can help your company or municipality develop a robust energy program to save you energy costs to pay for the program and to examine and improve your energy flexibility intelligently, as well. See the improvements and cost savings. Contact us at 914-584-6720 or at karell@CCESworld.com.