Strategic Rethinking of the Energy Industry.

• Author: Nodoushani, Omid

INTRODUCTION

As our current energy consumption contributes negatively to climate change, some countries are looking to changing their impact. I see the future of the energy industry as driven largely by hydrogen and nuclear power. With this, problems will need to be addressed and innovations in the technology will need to be made.

This paper will start by giving a background on the energy industry. It will look at the current energy consumption of the United States and globally and show the different types of energy used. It will then talk about environmental and health problems associated with these types of energy sources and the current energy industry. After this, it will look at the focus of this paper, which is nuclear and hydrogen power. The paper hopes to identify the past problems associated with nuclear and hydrogen energy, show the benefits they can have, and discuss the relevant problems that need to be solved and innovations that need to be achieved to make them a more viable option. It will conclude with a summary of the text provided and conclusion.

BACKGROUND

The world's current energy environment is different than it has been in the past. Since the Industrial Revolution, oil and fossil fuels have been at the forefront of the energy industry, but this has caused many environmental concerns. The use of fossil fuels and oil consumption releases harmful greenhouse gases into the atmosphere, which contributes to global climate change and health problems. With these factors, there is an overall increase in the consumption of energy. Lippelt and Sindram (2011) found that by 2009 energy had risen to 131 million gigawatt hours consumed. (1) This increase in the consumption of energy has not helped mitigate the negative effects of using fossil fuels and if things do not change, the problem will only get worse.

The EIA (2013) predicts that if current trends do not change, world energy consumption will increase by 56% and fossil fuels will still represent 80% of the market by 2040. (2) Included in their analysis of fossil fuels is the use of natural gas. With a global population substantially increasing, it is safe to assume that the demand for energy will increase further. The Economist (2008) believes that this increase in demand gives greater opportunities for alternative energies. (3) While alternative energies like solar, wind, hydropower, and nuclear are being used to further supply energy to countries, fossil fuels still remain the most prominent source of energy.

When looking specifically at the United States' current energy consumption, EIA (2018) found that 80% of the energy consumed was through fossil fuels. (4) Included in this is 37% from petroleum, 29% from natural gas, and 14% from coal. 11% is represented as renewable energies and includes geothermal, wind, biomass, biofuels, wood, solar, and hydroelectric. The remaining 9% comes from nuclear power. As can be seen above, the United States has not made substantial movements in switching to alternative sources of energy. To avoid any further negative externalities, the future of energy must change.

1. The Environmental and Health Problems of Increasing Energy Consumption

   The main focus on energy and its effects on the environment is due to the use of fossil fuels. The EPA (2017) mentions that burning fossil fuels as energy releases nitrogen oxide gas and carbon dioxide. (5) This nitrogen oxide gas creates smog and acid rain. A large amount of it is due to the transportation and electric power generation industries. Nitrogen oxide gas can also have negative effects on our respiratory systems. Seay (2017) explains, in an example of Volkswagen incorporating a "defeat software" in their cars to emit over the legal standards of nitrogen oxide in their diesel vehicles, that this issue caused severe respiratory problems, and that the company ended up emitting 40 times the legal amount. (6) While not all companies end up trying to cheat the system like Volkswagen did, their reliance on diesel and other fossil fuels affects the environment and health of people around the world. What is interesting to see is that these dangerous chemicals do not just stay at the sites where they are emitted, but they travel with the wind. The negative effects of these pollutants can be felt by everyone.

   An increase in the population and expected increase in demand of energy will just contribute to higher amounts of nitrogen oxide and carbon dioxide gases being released into the atmosphere; this is if the current energy environment does not change. There needs to be a better way for energy to be produced so that the environment is not as harmed nor the health of consumers. A switch away from fossil fuels needs to be made. The fact mentioned earlier, that 80% of the world's energy still comes from fossil fuels, needs to change as well.

   Changing Preferences

   While the global energy industry continues to depend on fossil fuels, this does not mean that individuals and countries have not made steps in changing this. Lewis (2016) described the Paris Agreement, which is a global agreement by countries in the United Nations to decrease their fossil fuels and carbon emissions. (7) The goal is to stop global warming before it reaches 1.5C higher. Many predict that if levels were to reach 1.5C higher, that the sea levels will rise and nations will be affected. While this stands as a global climate commitment to reduce the use of fossil fuels, the United States has removed itself from the accord.

   Shear (2017) explains that President Trump withdrew due to wanting to protect the United States' domestic business. (8) He believes that the pollution controls will have a negative effect on jobs in the United States. While this is the current administration's view, some companies and researchers have made it a point to look at the triple bottom line, or people, planet, and profit. (9) This allows companies to manage their own impact on waste, energy, air quality, employment, personal income, and health and wellness of employees. Seeing that there is a concern for how the current environment is affected related to the energy industry, things have the potential to change and there is an opportunity to produce energy beyond fossil fuels.

2. Dependence on Fossil Fuels is not the Answer

   In the past, there have been negative impacts on some businesses who have been dependent on oil and fossil fuels. Alpanda and Peralta-Alva (2010) remark that during the oil crisis of 1973, the market value of U.S. corporations was cut in half due to the rise of oil and energy prices and a decline in energy use after the...