Against a backdrop of growing global energy demand and rising prices, the discussion around security of supply has gained importance for all countries, and it is no different in the United States.
With gas prices hitting more than $5 a gallon, energy is high on the agenda and there is an increasing drive for reliable, affordable and ever cleaner energy in the US. To achieve cleaner and reliable energy, a clear and sustainable Energy Policy is needed to guide investment and ultimately the future of energy for the country.
Joining with the global community, last November saw the country’s commitment to global climate action reaffirmed at COP26. Although some felt it didn’t go far enough, we at Xodus feel it has ensured that the US is on the right track.
As a global energy consultancy, we have a foot firmly in both camps: renewables and fossil fuels. Xodus sees the United States as an exciting market to be engaged right now. We are at the beginning of a generational shift in how we produce, distribute and use energy.
Throughout the country, we have varied energy resources. We must maximize these resources and work together to understand and deliver a balanced and diversified energy future. It is vital to bring people to the table, who may have resisted a change, and engage in the conversation. The US is committed to managing its energy needs with the climate crises alongside the rest of the global community and is fully invested in getting it right.
Drive to be cleaner
We firmly believe that oil, and in particular natural gas, will play a role in moving the world to net zero. To ensure the industry is relevant in the future, a transition needs to happen. The traditional energy sector needs to decarbonize and produce net zero products. It must demonstrate a move to producing cleaner products and do this in a more transparent manner. A baseline of current emissions needs to be accessible and benchmarks for improvements need to be laid out, which includes reducing flaring, venting and leaks to name a few.
The oil and gas industry also needs to adopt decarbonization technologies such as CCUS and hydrogen. CCUS has been named by the International Energy Agency as a key tool to support global climate goals, however Xodus does not see that it is viable with current tax incentives.
We believe if 45Q is raised to $85 per metric ton for CCS versus the current rate of $50 per metric ton, we would start to see storage projects become economically viable. If the US sees real life CCUS projects, with a path to scale, we believe there is great potential to play a large role in decarbonizing the US’s oil and gas industry and manufacturing sectors.
There have been great strides made in the US commitment to renewable energy and offshore wind power specifically, with the Biden Administration’s goal of 30GW by 2030. Solar also plays a major role in various US regions which demonstrates that renewable energy can come from multiple sources and coexist.
With Vineyard Wind now fully permitted and moving to construction and other projects close behind, offshore wind is rapidly advancing. The high-level of interest in the recent NY Bight leasing round demonstrated the level of developer commitment. To fully realize the potential of offshore wind, there are many hurdles we must overcome to hit state and federal level targets that have been established.
For offshore wind development to continue in a positive, consistent trajectory, we need to see a series of actions take place including: a domestic supply chain, an upgraded transmission grid infrastructure, and a predictable Bureau of Ocean Management (BOEM) permitting process.
From the Xodus perspective, our supply chain work has helped identify local, domestic opportunities for companies to engage in the offshore wind supply chain but has also examined how adjacent companies can participate and grow in this new industry. To aid in company expansion into the supply chain, we are working with developers, state and federal governments and communities to support these opportunities and work to create industry clusters on the east and west coasts.
This is what we do
From Boston to Houston, we are working across the energy sector in the US – partnering with new energy developers looking to get offshore wind projects off the ground as well as supporting oil and gas companies in their efforts to diversify and decarbonize.
My team in Boston combines local knowledge and understanding of the dynamics in the US with our expertise from Europe and the lessons learned from early-stage projects. By understanding what has worked in other parts of the world and applying those lessons to the US market, we are able to present and execute pathways for the success of an energy transition. These lessons can be applied to support the creation of a strong and domestic supply chain, economic and environmental justice, and generational employment opportunities across the US.
It’s an exciting time. Offshore wind is not only vitally important for us to meet climate goals but is also an economic driver that will impact generations to come. The NY Bight offshore wind leasing round demonstrated the excitement surrounding this industry. We now need to take lessons learned as we pivot to leasing rounds in North Carolina, California, Gulf of Mexico and beyond.
The US has a once-in-a-generation chance to get this right and show how offshore wind can deliver good-paying, high quality jobs for all people especially those who have often been underrepresented in our energy industry. It’s a socially monumental opportunity to engage in community-driven approaches to champion the need for diversity, equity and inclusion in the industry and initiatives.
I am passionate about success of this industry and the impact it can have on the United States and the world. By ensuring that we create a more inclusive sector for everyone; one that creates quality jobs and improves the health of our neighborhoods and planet, there is a chance that we can begin addressing climate change at a speed needed to meet our targets.
We’re proud to be at the heart of this movement.