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Jeff Siegel

Written By Jeff Siegel

Posted April 15, 2013

Former DOE secretary Steven Chu was an incredibly nice man.

I met him once at a hearing on natural gas.

Unfortunately, nice doesn’t cut it when it comes to policy. And quite frankly, the man was very ineffective in his role as Secretary of Energy — and not because of a few failed companies that sucked from the government teat…

That’s inevitable, regardless of who’s steering the ship. Rather, Chu was ineffective because he was a brilliant scientist who didn’t possess the skills to think outside the lab.

Don’t get me wrong; R&D is paramount if we truly seek to embrace all forms of power generation in a clean and fiscally responsible way. But waiting for metaphorical beakers to bubble doesn’t move us forward in a timely fashion.

As far as I’m concerned, we mostly saw a lot of studies commissioned, a lot of handouts, and a lot of talk about an “all of the above” approach — which, quite frankly, is smart policy, but still doesn’t amount to much when natural gas is so darn cheap.

Diversify!

It’s easy to blame the government for not supporting renewables enough or trying to kill the coal industry.

But the truth is nothing has stalled “all of the above” as much as natural gas. Because let’s face it; whenever we get access to cheap energy resources, we forget about everything else. And we do this at our own peril.

I’m not saying support for natural gas is unwarranted. In fact, we’d be fools not to take advantage of this gift. But natural gas isn’t going to be this cheap forever…

So instead of putting all of our eggs in one basket, we should be using this wealth of cheap gas to build out and bolster our entire energy infrastructure, so that down the road, when natural gas heads north again, we’re not right back to where we were just a few years ago.

How do we do that? Diversify, diversify, diversify.

One Size Doesn’t Fit All

Although we never seem to learn this lesson, a “one-size-fits-all” approach rarely works for anything. It’s not going to work for health care, and it sure as hell won’t work for energy.

Fortunately, individual states do have a lot more to say about power production, and if you take a close look at how our energy mix looks across the nation, you’ll see the transition to a more diversified system based mostly on geography.

In the Midwest and Texas we now see an enormous amount of wind which, much like solar, works as an excellent complementary resource with natural gas, of which we see an abundance in those regions as well.

Most of the United States has excellent solar resources, too, which is why, even in New Jersey, we’re seeing record amounts of solar installed. And certainly the state of California is blessed with a fantastic solar resource that now allows residents to generate more than one gigawatt of solar power.

Of course, it would be naïve to suggest politics doesn’t play into this, too. After all, there are few states where you’ll find as much policy love for solar than California — just as you’ll find little political support for sun-powered electrons in Arizona, where the resource is the best in the nation, but the local government would rather rely almost entirely on nuclear (a mistake from where I see it, but if that’s what they choose, so be it).

And we definitely know coal’s days are numbered — though from an environmental standpoint, I think this is another terrible idea.

Coal is, Well…

Although coal is the dirtiest form of utility-scale power production, not burning it here actually does more environmental harm than shipping it off to China.

Let me explain…

It is true that there are a myriad of environmental burdens placed on us from the use of coal. However, the coal-fired power plants in this country burn much cleaner than most plants in China, where many expect we’ll be sending much of our coal bounty from here on out.

As well, after we produce the coal (which happens whether or not it’s burned here), we have to move it to the West Coast, where it’s then shipped to ports in the Asia market. The logistics alone add a huge environmental burden.

I’m not saying I’d prefer more coal plants over distributed solar or responsibly-produced natural gas. But to assume that by leaning on the U.S. coal industry we’re somehow saving the planet is not a safe assumption to make.

In any event, the future of U.S. power production will not be kind to coal. And I do believe natural gas and solar will continue to grow dramatically — and not because a bunch of lawmakers decide to conduct million-dollar studies, but because this is what the market is dictating.

So that’s where I’m putting my money.

On the solar side, I’m all about next-generation solar technology.

And on the natural gas side, I’m sticking with what works. And what works are the players that simply have the best-producing properties with the lowest operational costs.

To a new way of life and a new generation of wealth…

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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