Thomas Friedman laid out a future in his book, “ Hot, Flat, and Crowded: Why We Need a Green Revolution - and How It Can Renew America” a future scenario that I think we are on the cusp of tipping over. The book was published in 2008 and it was before it’s time, and now with the current situation it feels as though we have the forces at play that are different than what Friedman fully predicted but nonetheless the outcomes are the same. Peak oil may or may not ever happen, we hear differing estimates of proven reserves all the time and it seems oil companies can keep producing ever more.
With the cost of gasoline and natural gas being the same price as it was in the 1970’s when adjusted for inflation (https://www.usinflationcalculator.com/gasoline-prices-adjusted-for-inflation/, https://www.macrotrends.net/2478/natural-gas-prices-historical-chart energy is as the same cost as it’s ever been over the past 30 years. Natural gas is so cheap that oil producers flare it versus piping for use. When drilling a new natural gas well drillers will flare the gas until the pipeline is installed as they are paid once the well is drilled. (https://www.bloomberg.com/news/articles/2019-08-30/flaring-or-why-so-much-gas-is-going-up-in-flames-quicktake) Any immediate future with a renewable energy and energy storage mix will have to include some sort of fossil fuel generation for electricity as there are few days a year that create large dip in both solar and wind generation that becomes diminishing in trying to cover. Small gas turbines that are highly efficient could cover these gaps while significantly reducing the carbon on the electrical grid.
The electrical grid is owned by the local energy producer and in a lot instances not interconnected making moving electricity harder and in the case of California we will probably see the state take over the grid with PG&E maintain the infrastructure https://www.reuters.com/article/us-pg-e-us-sanfrancisco-assets/pge-turns-down-san-franciscos-2-5-billion-offer-to-buy-assets-idUSKBN1WQ2SO. In the future we see smaller companies tie into the grid with their energy producing technologies, the grid will distribute the energy and you will have a choice of where you buy your energy from. The grid will be state or federally owned as it will be deemed a state or national asset. A carbon tax, while still politically unpopular, in time it will be more prevalent at the state level and we will see changes coming at the national level.
Electric cars are on the fore front and we will have more batteries seating around ready to engage in the grid in real time energy production or charging as suggested in Freidman’s book.
As we look to the future in the built environment we can no longer look at our buildings energy consumption as something that has to have an immediate or short term ROI, in many cases with fuel costs as they are there is no ROI, natural gas is the cheapest fuel and you should burn it as inefficiently as possible when making decisions solely on ROI.
Solely focusing on ROI is no longer the sole reason to make a decision, every business and building owner will need to consider the impact of their business on the environment. https://www.nytimes.com/2020/01/14/business/dealbook/larry-fink-blackrock-climate-change.html Investors and consumers alike are going to require leadership and will make decisions consciously on environmental stewardship. Business owner decisions will need to be framed upon a carbon calculation and that will give a true return on investment based upon a carbon impact.
Buildings are an asset class that will need to be energy producers and not energy consumers in the near future to isolate the cost of operation and ownership as we see radical shifts in our energy makeup and consumer expectations. Abandoning gas as our fuel for heating and converting solely to electric heating using heat pumps allows for the energy consumed to be produced with renewables, that in the future you will be able to select your energy producer or produce onsite.
Profit is still a driver of business success and any decision that would put a business in financial stress should not be undertaken, shaving a few profit points immediately while implementing energy strategies will ultimately have multiple times return on your capital expenditure. Leadership and environmental stewardship.