From March 25 to 27, the Wall Street Journal brought energy stakeholders from around the world to Santa Barbara, California. Titled “ECO:nomics 2015,” the program focused on the biggest issues confronting business and the environment, including investing trends, the latest innovations and market disruptions, the environmental movement’s future, the horizon of energy policy, and the meaning of “sustainability.” If you did not get a chance to attend, continue reading for the top 10 takeaways from this intellectually challenging and dynamic event! For the Journal’s full report, click here.
Disruptions are creating opportunities: All manner of forces, from price fluxes to government interference to demand shifts, have transformed the energy industry. However, these often daunting dislocations are creating opportunities for both traditional and renewable energy sources to creatively balance emissions and efficiency.
All eyes on the Clean Power Plan: EPA Administrator Gina McCarthy was on hand to defend the agency’s controversial Clean Power Plan. She remained upbeat on its prospects, coloring it as a way for states “to create their own path going forward.” Many are not sold on its ambitious target of a national 30% reduction in carbon emissions by 2030. Americans for Prosperity’s Tim Phillips estimates the plan will cause 240,000 job losses.
Technology expands possibilities for renewable energy sources: There was much buzz about technology’s role in producing cheaper and more reliable renewable energy. Tom Werner, President and CEO of SunPower Corp., declared that because of these advances “solar is going mainstream.” The future is bright for further innovations that will help solve issues of storage, grid reliability, and more.
… and traditional energy, too: The coal, oil, and natural gas industries haven’t missed out on discovering their own cutting-edge techniques. Fracking, at the forefront of the discussion, has completely transformed the oil landscape. Robert Murray, CEO of Murray Energy, discussed long-wall coal mining’s debut, projected as 10 times more productive than any other method. These new approaches along with many others are creating greater cost efficiencies across the energy marketplace.
Data must be pointed: Everyone knows the world is more data driven than ever, but with all the information available, how do investors decide what to use? Jean Rogers, founder and CEO of theSustainability Accounting Standards Board, said companies must focus on making their data relevant and usable to investors. Specifically, “how [known metrics and trends] affect the financial condition … of the company.”
Corporate initiatives can spark industry-wide change: More data isn’t just helping investor decisions; it’s sparking groundbreaking initiatives within companies themselves. Andrew Steer, President and CEO of the World Resources Institute, talked about new deforestation data that companies like Wal-Mart and Unilever are using. When moved to scale, it will bring the world’s palm oil supply from 15% deforestation-free certified to 90% in the next five years.
Diversity breeds innovation: All organizations are susceptible to consensus beliefs that act as roadblocks to innovation. To break insular thinking, Marc Davidson, Senior Director of Technology Production Enhancement at Halliburton, suggests looking inward and outward. “A lot of the people we’re hiring are from different industries,” he said, while the company also studies emerging technologies at start-ups and universities.
Consumers have a say: Both Lisa Jackson of Apple and David Cheesewright of Wal-Mart spoke to consumers’ power to proliferate green products. Apple has acted on customer feedback about battery efficiency, for example. Cheesewright, citing a Nielsen statistic that 55% of people worldwide are prepared to pay more for green products, thinks going directly to consumers is the best way for companies to leverage this voice: “seeing how people live, looking around their homes, seeing what products they stock, talking to them about how they shop is incredibly insightful in helping us serve them better.”
Know the market: What consumers demand is likely to vary based on their location. Wal-Mart’s Cheesewright spoke to the distinction between developed and developing markets. Customers in developing countries are “pragmatic,” for instance preferring dry shampoo and highly concentrated detergents in areas where water is a big issue. By contrast, consumers in the developed world are more “aspirational” in their purchasing decisions.
Whatever the future holds, balance is crucial: Across the interviews, panels, and presentations, there was a widely held sentiment that the globe’s energy future must involve balance. Nicholas Akins, Chairman, President, and CEO of American Electric Power, and Anthony Earley, Chairman, President, and CEO of Pacific Gas & Electric, spoke to the need for both renewables and fossil fuels in any portfolio. According to Earley, an absence of either in the long term could spell “real trouble.”