Change is undoubtedly coming to the energy sector, so how quickly should Louisiana adapt?
That’s the question that was posed by both Scott Angelle, former director of the Bureau of Safety and Environmental Enforcement for the U.S. Department of the Interior, and Loren Scott, who leads his eponymous economic consulting firm, today during a webcast hosted by 10/12 Industry Report.
From Angelle’s perspective, things change quickly, and Louisiana should begin seizing renewables opportunities sooner rather than later to secure the Gulf Coast’s spot as the world’s “energy transition zone.” However, Scott says there are still many obstacles that renewables must overcome before the emerging industry can topple the behemoth that is oil and gas, which already generates significant revenue for Louisiana and shouldn’t be discarded.
Underscoring both of their arguments was the concept of climate change, to which Angelle generally took a pragmatic approach.
“Much of the world believes it’s real, and many young conservatives believe we need to be more responsive to Mother Earth,” Angelle said, noting 75% of the world’s population has effectively joined The Paris Accord. “Louisiana has the opportunity and responsibility to recognize this and be responsive to those issues.”
By promoting the Gulf of Mexico—which boasts relatively low carbon emissions, zero marine mammal or sea turtle fatalities since at least 2017 and the lowest volume of oil spilled in 2018 and 2019—as an “environmentally advantaged province,” Angelle said Louisiana can explore new opportunities, including investments in a Northwest to Southwest global LNG expressway and offshore wind energy, that could allow for the growth of energy production.
Still, Angelle acknowledges the delicate balancing act it would take for the state to nurture its energy, environment and economy.
Meanwhile, Scott was less optimistic about the impact of the energy transition on Louisiana’s economy. He pointed to several actions the Biden administration has already taken—including the appointment of Deb Haaland as Interior secretary and the ongoing moratorium on lease sales on public lands and waters, among others—as signals of an “intense” regulatory environment for years to come.
These policy changes, he says, are based on the concept of climate change as an existential threat—a notion Scott sought to debunk throughout his presentation. At the same time, Scott expressed skepticism as to how quickly the national economy would embrace renewables as the preferred alternative form of energy.
“I think the transition will happen much more slowly than we anticipate,” Scott said.
How quickly electric vehicles will replace internal combustion engines hinges on when EVs are able to overcome various “gateway” issues, he said, such as affordability, range anxiety, the shortage of charging stations, the longer amount of time it takes to charge an EV, costly repairs, supply chain problems and mining issues.
Citing futurist Daniel Yeargin, Scott predicts the adoption rate of EVs globally won’t reach between 10% and 90% until the year 2050—which Scott said is more likely to stem from a government ban on ICEs than from EVs becoming more compelling to consumers, who use 27% of the world’s petroleum for everyday products like shampoo and aspirin and don’t currently have viable alternatives.
In the meantime, Scott says Louisiana should continue leaning on its existing energy sector, which finances its roads and boosts state and local government budgets.
“The transition won’t hit all states the same,” he said, “but Louisiana is one of them.”