Memo to the Next President: Addressing the Energy Crisis

In this exclusive web video, Kelly Sims Gallagher, director of the Energy Technology Innovation Policy (ETIP) research group, outlines the priorities on which the next president should focus in order to address the energy crisis and climate change.

For more videos, visit the Belfer Center YouTube Channel at http://www.youtube.com/belfercenter.

TRANSCRIPT

Kelly Sims Gallagher is director of the Energy Technology Innovation Policy research group at Harvard University's Belfer Center for Science and International Affairs. She is an international member of the Task Force on Innovation for the China Council International Cooperation on Environment and Development.

One challenege in the way of an "energy revolution" is the lack of technology. What kinds of technology need to be developed, and how can the next president encourage this?

Well, I think the biggest challenge to the energy system right now is the need to develop low-carbon technologies that are economic in the market place. So, the next president will really need to focus on creating an incentive structure that allows both the private sector and government-funded research to flourish in terms of the development and deployment of low-carbon energy technologies.

Considering the recent discovery that there are reachable shale beds of natural gas in the U.S., what are the pros and cons of tapping this resource?

Natural gas from shale has been uneconomic to produce for many years and the reason why is that it's trapped in sedimentary rock. So it's quite difficult to extract. But recent technology, which permits horizontal drilling, has allowed previously uneconomic resources to be exploited. And this has helped to increase the production of natural gas in the United States for the first time in this century. It's still not clear that the reserves that we have in terms of shale oil can be economically fully exploited. And that really depends on the level of the natural gas price. Gas prices are still relatively high so it's economic to produce the shale gas. But if gas prices were to fall back down, it would be more difficult to economically recover it.

Should the U.S. drill for oil in the Arctic National Wildlife Refuge (ANWR) and the off shore? Will this address the current energy crisis in a real way?

Depending on how you define the energy crisis, off-shore oil drilling and drilling in ANWR may help to increase the world supply of oil. The off-shore drilling and drilling in ANWR is not an immediate fix. Any kind of drilling will take quite a long time – the exploration needs to be done; wells need to be drilled; off-shore oil platforms need to be built. So it's a longer-term solution. And in any event, it's not guaranteed that increased off-shore oil production will help reduce gas prices at the pump. Whatever is produced will be sold on the world oil market, and whatever the prevailing world oil price is will be the level at which gas prices remain. So if it helps to add a lot to world supplies of oil, then prices should come down. But if the effect is pretty marginal, then prices may not fall too much.

What part does the international community play in the energy crisis, and in what way should the U.S. engage the global community?

I think, in my opinion, there are two dimensions to the energy crisis. One is the vulnerability and insecurity with large U.S. dependence on foreign oil and gas supplies. And the second, and more difficult challenge, is the global climate change challenge. In both cases high-degree of international cooperation is required to make significant progress to reduce or relieve the crisis. Taking the energy security question, if large consuming countries have a mechanism to cooperate with each other to release stock piles of oil in the event of a crisis or to build stockpiles in times of no crisis, that kind of cooperation really reduces the power that the oil suppliers have over consuming countries. And to take the climate change example, it's a global problem and the biggest emitters are the United States and China. And if those two countries don't cooperate with it's not going to be possible to address the climate change challenge.

How are energy policy and climate change connected?

Climate change is driven by burning of fossil fuels, and that's the main connection with energy. Some fossil fuels are more carbon intensive, and therefore more potent in terms of their global warming potential. Coal is the most carbon intensive of all the fossil fuels. And so to the extent we burn more coal, and we might want to do that from an energy security point of view, we make the climate change problem worse. And to the extent we're able to improve overall energy efficiency, use cleaner fuels, lower carbon fuels, and move, of course, to renewables or nuclear energy, which is carbon free, we're able to make great progress in terms of reducing global greenhouse gas emissions.