Last year I wrote about the two major energy revolutions happening globally, the shale revolution–mainly in the US–and the renewable energy revolution, focused more on technologies than geography but with big concentrations in Europe and increasingly Asia and the Americas. Two stories in the Financial Times (registration/subscription required), which has lately been doing an excellent job covering energy, illustrate that we are still in the early days of both. Bigger changes lie ahead.
One story covers the development of the “South Central Oklahoma Oil Play”, or SCOOP, an acronym that’s new to me and, I suspect, many of my readers. Continental Oil, a major player in the Bakken and other shale oil resource areas, has apparently reported that SCOOP may contain up to 3.6 billion barrels (oil equivalent) of recoverable oil and gas. That’s more oil than was produced in Alaska in the last 15 years, based on the graphic accompanying the article.
Along with the unconventional portions of the Permian Basin in Texas and New Mexico and Ohio’s Utica shale, and with the reviving liquids production from Wyoming’s Powder River Basin and elsewhere, the upside for US oil output still looks significant. Its economics may become challenging if oil prices remain weak for more than the next year or two, but our picture of oil and gas as mature resources may need to be revised.
The title of the other article, “US Solar and Wind Start to Outshine Gas” seized my attention. Its key quote is from the head of power, energy & infrastructure at investment bank Lazard: “We used to say some day solar and wind power would be competitive with conventional generation. Well, now it is some day”–at least for some technologies, in some locations, at larger scales. The firm’s latest analysis shows continued cost declines for wind and solar.
It also raises a very interesting and pertinent question about whether subsidies for residential-scale solar (i.e., rooftop PV, which remains much costlier than at utility scale) are “distorting the long-term energy planning process.” That’s a question we are likely to hear a lot more about when the current US 30% investment tax credit for solar equipment, which benefits higher-cost installations more than cheap ones, comes up for renewal. Nevertheless, solar power, particularly in combination with emerging energy storage solutions, looks increasingly likely to transform the utility landscape in the years ahead.
You may have noticed a decrease in my blogging frequency, recently. I’ve been preoccupied with project work and personal matters for the last couple months, but I should be back to my normal pace by October. There’s certainly no shortage of topics worth discussing here.
Photo Credit: Wind, Solar, Shale, and Change/shutterstock