Energy realities require pragmatic solutions
Rick Muncrief is the president and CEO of Devon Energy. This essay is part of the Global Energy Agenda.
Energy is the lifeblood of modern civilization, enhancing the lives of billions of people around the world. It is fundamental to human health, economic opportunity and prosperity, and global security.
With over four decades of experience in the oil and natural gas industry, I am excited by the opportunity that is in front of us: how to grow the energy system, while making it cleaner and more resilient. As we look to the future, in a world that is becoming increasingly fragmented, it’s crucial to address the energy realities we collectively face.
The world needs more energy, not less.
The first reality is that the world needs exceedingly more energy, not less. According to the US Energy Information Administration, global energy demand is projected to grow more than 30 percent by 2050. This surge in demand is fueled not only by the meteoric rise of artificial intelligence and data centers, but also growth in manufacturing and transportation. In emerging economies, energy demand will continue to rise as populations grow and incomes increase, enabling billions of people to drive, access new goods and services, and power their homes.
Despite significant progress in expanding energy access in the past decades, over one billion people still live in energy poverty, lacking reliable, affordable, productive power. More than two billion people still do not have access to clean cooking fuels or technologies, like natural gas or electricity. Every human being deserves access to the energy they need to thrive—the privileges that so many of us enjoy every day.
Energy security underpins global security.
The second reality is that energy security, economic security, and global security are intertwined and interdependent. Diverse, resilient energy systems are necessary to avoid economic disruptions, geopolitical instability, and the likelihood of conflict around the world. The European Union’s (EU) previous reliance on oil and natural gas supplies from Russia highlights the dangers of overweighted dependencies on rogue nations that have the power to weaponize energy to serve as political leverage or tools of coercion in foreign affairs. The devastating invasion of Ukraine and resulting energy supply constraints in the EU also highlight the importance of global energy leadership and international cooperation, as Russian gas supplies were replaced with other sources of energy, including liquefied natural gas (LNG) from the United States.
Nations with access to diverse, reliable, and affordable energy sources and supply chain inputs—either domestically produced or sourced from exporting international allies around the world—can ensure their people and economies thrive.
All sources of energy have tradeoffs.
The third reality is that just as each source of energy has life-changing, transformative benefits that fuel human prosperity, each source also has tradeoffs and negative externalities that should be acknowledged and appropriately balanced in the development of sound public policy and in business.
To meet growing global demand, we need to produce more energy from traditional and non-traditional sources—and we must produce it more responsibly tomorrow than we do today. For oil and natural gas development, this means committing to reducing carbon and methane emissions. For wind, solar, and battery development, this means minimizing land-use impact and diversifying supply chains. For all energy development, this means ensuring we keep our people and communities safe. We must also be reasonable about the pace, magnitude, and time required to scale new energy resources and enhance existing resources— and the tradeoffs for doing so.
We cannot prioritize clean energy over reliability and affordability, we cannot pursue reliability and affordability at the expense of the environment, and we cannot develop energy policies and systems that do not account for geopolitical risks domestically and abroad.
Clear eyes are critical to simultaneously growing energy systems without sacrificing reliability, affordability, or the environment.
Energy has become a politically polarized flashpoint. It has become “good” versus “bad” and “you” versus “them,” at a time when we should all be coming together to solve the challenges and opportunities in front of us. Now more than ever, we need a pragmatic approach to removing barriers that prevent us from providing the energy access and security the world needs. This includes building infrastructure to move energy where it’s needed most—from oil and natural gas pipelines to transmission lines to LNG terminals to geothermal wells to carbon capture systems and everything in between. In the United States, we need common-sense policies to address meaningful permitting reform that unlocks our vast energy resources and bolsters not only our nation’s energy and economic security, but also those of our allies. While globalism may be receding, energy systems and markets should continue to be highly integrated. We must continue to invest in economic partnerships and trade policies that minimize supply chain disruptions, distort trade flows, slow growth, raise energy costs, and accelerate fragmentation.
Energy is essential to the technological revolutions unfolding before our eyes and to bringing billions of people into a higher standard of living across the globe. Let us seize this moment to come together in the pursuit of pragmatic and durable policy, technology, and market solutions that grow our collective energy resources to meet the needs of today—and tomorrow.
Devon Energy is a sponsor of the Global Energy Center.
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Image: A drilling crew moves drill pipe into place on an oil rig in the Permian Basin near Wink, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford