25x'25: Investing in America's Energy Future

Until recently, renewable energy has generally been more expensive than conventional fuels like oil and natural gas. But the price of those fuels has risen steeply in the last few years as our domestic supplies run out. Now renewable energy can save consumers money - by creating competition for gasoline in the form of ethanol and biodiesel, and by freeing up more natural gas to be used in homes and industry instead of power plants.
The U.S. Department of Energy's Energy Information Administration recently predicted that oil prices will remain above $50 per barrel for the next 20 years. High oil prices ripple throughout the economy by increasing transportation costs for all goods, and the U.S. already spends more than $450 million every day to import oil. That's more than $500 a year for every person in America. Similarly, spikes in natural gas prices impact home heating costs as well as industrial processes. But renewable energy can help ease demand for fossil fuels.

Developing renewable energy will also bring new technologies to market and create jobs in America. In 2005, Washington State adopted progressive, performance-based incentives for both manufacturing and installment of solar panels, similar to the extremely successful policies Germany has used to develop its solar industry. The year after Germany instituted its policies, demand for solar installations jumped by 50 percent. The renewable energy sector in Germany, dominated by wind and solar, now employs over 60,000 people.

The economic opportunity for America is even more impressive. By 2020, wind energy alone could create 80,000 new jobs and $1.2 billion in new income in the U.S. In addition to creating jobs, manufacturing wind turbines and developing wind farms diversifies local economies and increases local tax bases. A 2004 study conducted by the University of California at Berkeley concluded that the renewable energy sector generates more jobs than the fossil fuel-based energy sector per unit of energy delivered, and supporting the renewable energy industry will benefit sectors of the economy and states that currently suffer from high unemployment.

The U.S. is also poised to greatly benefit from the expanded use of renewable fuels, like ethanol and biodiesel. Already the world's second largest producer of ethanol, the U.S. has the potential to produce at least 50 billion gallons of cellulosic ethanol by 2025, using highly efficient methods of transforming agricultural crops and residues. A senior Shell official has predicted that "the global market for biofuels such as cellulose ethanol will grow to exceed $10 billion by 2012."

Renewable energy is already at work in many states throughout the United State. Currently, there are 24 states plus the District of Columbia that have RPS policies in place. Together these states account for more than half of the electricity sales in the United States. (Five other states – North Dakota, South Dakota, Utah, Virginia, and Vermont – have nonbinding goals for adoption of renewable energy instead of an RPS.) Texas' renewable energy requirement was so successful that its goal of 2,000 megawatts (MW) by 2009 was increased by the Texas Legislature in 2005 to a renewable-energy mandate of 5,880 MW by 2015. Utilities in Nevada have also reported that they expect their first renewable contracts to save them $15 million over 20 years.

Pursuing the 25x'25 vision will benefit the country. Not only does renewable energy have the benefit of being cleaner and thus reducing health risks and costs, but it also relieves pressure on nonrenewable resources, thus lowering overall energy costs.