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.