Don C. Brunell: Opportunities with the Shift from Oil

As 2017 approaches, it is fascinating to look back at the vast changes in our lives over the last century and then imagine where we may be headed in the next 25 years.

It is hard to picture that in the year 1900, more than 100,000 horses were in New York City. However, in 1917 the final horse-drawn carts, cabs and carriages left the city to be replaced by trucks, cars and buses. Henry Ford had perfected the “horseless carriage.”

The Economist, a London-based magazine, highlighted the transformation in special report on the future of oil.

While some look back at the “good old days,” New York leaders convened the first international urban planning conference in 1898 to figure out what to do about all of the manure.

“When it rained, people had to navigate a river of muck, and fly-infested dungheaps when the sun shone.” It was the “most malodorous environmental challenge” of the time.

“A hundred years ago oil was seen as an environmental savior. Now its products are increasingly cast in the same light as horse manure was then: a menace to public health and the environment,” the Economist surmised.

Regardless of one’s views on climate change, the Economist reports global investment strategies are shifting from finding new sources of oil to finding alternatives to it.

Looking ahead, the International Energy Agency (IEA) projects that oil demand will peak in 2020 at just above today’s levels. After that oil used “in passenger transports and freight would plummet over the next 25 years, to be replaced by electricity, natural gas and biofuels,” the Economist states.

So what does this all mean for those of us living in Washington?

The trend highlights the importance of our hydroelectric dams which generate three-quarters of our state’s electricity. That dam network provides low cost, reliable electricity for residential, commercial and industrial ratepayers and produces no greenhouse gases.

As coal-fired power plants in Washington, Oregon and Montana are phased out, they will be replaced with natural gas, which our state does not have, and biomass, which Washington has in abundance.

Wood wastes and natural gas produce CO2 but at lower levels than coal. But there are environmental and safety tradeoffs resulting from the switch to solar and wind generation.

“Solar panels glimmering in the sun are an icon of all that is green,” Dustin Mulvaney wrote in an Institute of Electrical and Electronics Engineer (IEEE) publication in 2014. He is an assistant environmental studies professor at San Jose State University,

“But while generating electricity through photovoltaics is indeed better for the environment than burning fossil fuels, several incidents have linked the manufacture of these shining symbols of environmental virtue to a trail of chemical pollution.”

Greenhouse gases are also emitted in photovoltaic panel production, but it varies substantially by technology and geography.

The point is over the years, one set of challenges replaced another–whether it be the pungent odor from manure heaps or CO2 overload in our skies. The great thing about America is our system is geared to incentivize entrepreneurs to solve problems.

Remember, it was not a government mandate which forced Henry Ford to build the Model T, it was an opportunity.

May 2017 be filled with opportunities.

(Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at [email protected].)