In its recently released study, the Global CCS Institute covers in detail both the importance and challenges of carbon capture and sequestration. While carbon dioxide has successfully been used in parts of the U.S., including Mississippi, to stimulate oil flow out of old wells (enhanced oil recovery), the source of the CO2 has been natural geologic sources rather than captured CO2 from power plants or elsewhere. The technology for carbon capture on industrial emissions, like with power plants, remains in the development and commercialization phase, and the Kemper power plant in east Mississippi, once operating, will be an early commercial scale user of the technology.
Much of challenge ahead for carbon capture and sequestration is overcoming the technology expense. Therefore, places like Mississippi with an enhanced oil recovery industry and the accompanying CO2 pipeline infrastructure are logical starting places for technology deployment. Rather than CO2 being an expense and liability, enhanced oil recovery enables CO2 to be an asset valued in the marketplace. The benefit of CO2 sales, in turn, can go back to cover the technology costs.
Perhaps the bottom line for carbon capture and sequestration is, at least in the near term, the practice will probably require enhanced oil recovery to help make the economic case.
As the developing countries like China and India continue to consume more energy at a staggering rate, U.S. energy policy should consider long-term supply needs as a matter of economic competitiveness and national security. Developing countries continue to expand industry and add power production while also transforming their economies to look more like the United States, with passenger cars and computers and televisions in homes. The amount of energy required to support this is almost incomprehensible.
Daniel Yergin of IHS recently gave his perspective on meeting the world’s future energy needs. With a possible increase of 30 to 45 percent by 2030, Yergin points out that, ”the challenges of meeting rising energy needs in the decades ahead, of assuring that the resources are available on a sustainable basis to support a growing world, may seem daunting; and, indeed, when one considers the scale, they truly are.”
Also interesting are Yergin’s thoughts on technology. He observes that, while technology will likely alter the dynamics, technology in energy has required long lead times. Yergin also recognizes the way we use energy, the progress made in energy efficiency, and the necessity of greater efficiency ahead.
Today’s economy is truly a global economy. Meeting the world’s energy demands is an opportunity for resource-rich and manufacturing-friendly Mississippi, but attention to our own needs is also critically important. Investment in a diversity of long-term energy assets is the right policy for Mississippi. Additionally, demand will necessitate activity in technology development and deployment, which yields high quality local development opportunities.
The bottom line: The global energy economy will be ever-growing. Opportunity to attract investment and jobs will persist. Mississippi developers should be focused and aggressive in this sector.
As Mississippi considers energy as an area of focus for economic development, we must understand Mississippi’s energy strengths and weaknesses in order to leverage our strengths and fill gaps in critical areas of weakness. Below you will find examples of one strength and one weakness.
In today’s cautiously expanding economy, the shale revolution has been a very bright spot in the economy, maybe the only bright spot. Oil and natural gas production from shale formations has truly been a game changer for the U.S. economy and without it over the past several years, who knows where the economy would be today? Possibly back in recession. One area of strength for Mississippi is the abundance of interstate natural gas pipelines passing through the state. Why is this a strength? Because it gives our state the ability to access enormous natural gas supplies needed for manufacturing. The shale revolution and abundant U.S. energy supply provides the opportunity to see a resurgence in manufacturing, especially energy intensive manufacturing. Hopefully, our leaders in Washington, D.C. will embrace this and not waste away the opportunity with onerous regulations and taxes that send jobs to our global competitors. Mississippi policy and development efforts should consider how to leverage our natural gas assets for manufacturing expansion.
As with most any area of the economy – telecommunications, healthcare, agriculture – technology in energy continues to change rapidly, offering more and better options to the marketplace. Technology development in energy is focusing not only on how we get energy but also on how we use it. The sheer size of the market drives technology development for those looking to capture a small share of an economic necessity. In 2010 dollars, the size of the world energy economy was $6.5 trillion, so capturing 0.1% of the market is a $6.5 billion proposition. The point is, with global demand ever climbing and a competitive economy always looking for better solutions and lower costs, technology development in energy is very active. The problem is, Mississippi has a poor record of attracting private R and D capital, and thus, has poor metrics in recent years for technology commercialization. Publicly funded research at universities has resulted in good public research capacity, but private R and D activity is quite low. If Mississippi is to play a significant role in tech-based economic development, the ability to attract private R and D and commercialization capital must be considered.