Energy sector disruption: 3 political lessons from 2012

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By Peter Gardett

AOL Energy

 

Working in the energy sector is an inherently political activity. I once sat opposite a friend of a friend at lunch, and when she found out that I covered the energy business she quizzed me on the industry's practices and asked if I found people often wanted to hit me. I don't find that, but the way a modern economy depends on the energy business means that everyone - along the entire spectrum of beliefs - also has opinions about its politics in ways that don't necessarily reflect a subtle, shifting, complex reality.

 

Over the course of 2012, we've been focusing on the issues at play in energy politics, and have gathered them together in a special hub that can be found on AOL Energy here.

A heavily contested presidential election against the background of sweeping changes in the energy sector itself proved a perfect time to reexamine long-held theories about the politics of energy. While the traditional cultural understanding of resource-access-obsessed oil and gas executives locked in battle with environmental activists constantly advocating for more stringent regulations remains an easy and valid way of portraying energy politics in the U.S. as we leave 2012 for the uncertain future of 2013, we also discovered some surprising new industry trends and political developments that may undermine the ferocity of old disputes while giving rise to new standoffs.

3. Traditional methods of distribution are not equipped to handle changes in use.

Early attempts to put the U.S. on a universal smart grid have fallen short of high ambitions, but the promise of technology that tracks usage on a much more granular level and feeds it back to production centers in real time remains revolutionary in ways that go well beyond the vaunted "efficiencies" and "savings" that have set the tone in energy company communications to date.

Companies and customers awakened to the possibility of supply interruptions and reliability changes are now increasingly looking at integrating distributed generation into their portfolios, making them less reliant on centralized state-sanctioned power companies and the politics and regulatory structures that support them. Additionally, use of natural gas in everything from increased power production to transport flowing from regions without access to established distribution networks is shifting political allegiances and identities at the state and regional levels.

None of these shifts is complete, nor are the outcomes definite. But the changes are real, and energy politics is continuing to race to catch up to the reality that disruptive energy technology has begun to create. The rewards are enormous, so expect 2013 to be the year energy politics moves from mainstream consciousness to certifiable action.

 

AOL Energy provides access to news, analysis, thought leadership and discussions about the top stories in the electricity sector today. Participants in AOL Energy stay ahead of breaking news, participate in high-profile events and enjoy access to the central hub of the industry community as it transforms in response to to fast-moving changes in energy politics and regulation, deals with financial challenges and leads technological advances.

 

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