The fossil fuel sectors are fighting back against a wave of popular sentiment that they say is ill-founded. The oil, gas and coal industries say that their products are abundant and reliable, allowing this nation achieve its economic well-being.

Global energy demand is expected to rise by at least 30 percent over the next quarter century and oil, gas and coal will remain critical. Why? Because they are energy-dense and can be stored, making them reliable sources. Until greener forms of energy can reach economies of scale, fossil fuel advocates say that this country should allow easier access to them so that they become more affordable. The added wealth, in turn, promotes environmental progress.

“I believe the United States has an opportunity – in fact, a great responsibility– to create an energy policy with affordability at its core,” says Chevron Corp.’s Chief Executive John Watson in a speech. “We need a refreshed policy approach that recognizes the value of fossil fuels and allows a market-driven transition to affordable substitutes over time. And I would suggest that only an energy policy with affordability as its central goal has the potential to deliver long-term economic, energy and environmental security.”

Harmful air pollutants in the United States, he adds, have fallen by 70 percent in the last two decades. By contrast, in poorer nations that do not have universal access to electricity,  air and water quality suffers. The riches that a thriving economy creates enable the development of the actual technologies it takes to reduce emissions, says Watson.

To that end, Watson is emphasizing that the United States needs to move away from policies that limit energy development and toward those that facilitate it. Even with “stubbornly high” gas prices, he says that oil and gas developers cannot get access to plush regions such as the eastern Gulf of Mexico.

None of this is to say that renewables will not be a valued part of Chevron’s portfolio, the executive says. Because of its geothermal holdings, the company is the largest producer of green energy in the oil sector. With that, Watson says that it remains committed to generating more renewables at scale and without subsidies.

“Getting to commercial scale remains a fundamental hurdle for most renewable energy,” says Watson. “Both wind and solar require enormous amounts of land to generate the same volume of energy as fossil fuels and they require backup power.”

Self-Serving Approaches

Their pitch is self-serving and meant to disrupt the emergence of alternative energies, say those who think the nation must wean itself from dirty fuels. Enabling cleantech will require subsidies as well as regulations that encourage the cleaner use of energy -- all things in which the fossil fuel sector has been skeptical.

But Watson responds that trying to replace those fossil fuels by mandating the production of and use of renewables before the technologies are ready will only increase costs. Nevertheless, he acknowledges that oil and coal companies are tempting targets for those who see them as fat cats and polluters. Chevron earned $19 billion last year -- but it is investing $26 billion around the world, including $7 billion here.

In the case of coal, if the rash of environmental regulations now pending is to go through without delays then estimates suggest that 20 percent of the current fleet would shut down. Much of those older and less efficient plants, however, would be replaced with those fired by cleaner natural gas.

Through a series of actions, the Environmental Protection Agency plans to reduce the level of pollutants -- including mercury, lead, sulfur dioxide, nitrogen dioxide and carbon dioxide. While utilities dependent on coal-fired power would like to sideline those policies, EPA has shown a willingness to adjust its timetables as well as its requirements.

“Nonetheless, we will continue to do what we can politically as well as in general dialogue with the EPA to try to put greater rationality in what it is that they are trying to accomplish,” says Michael Morris, chief executive of American Electric Power, in a conference call.

Globally, however, its a different story: 20 percent of the population has no access to reliable energy, making cheap and abundant coal an essential element to grow their economies. Therefore, the developed nations should seek to commercialize the technologies to reduce emissions and especially those can minimize carbon levels, says the International Energy Agency.

The fossil fuel sector has made a strong argument that it will remain vital for the foreseeable future. Its words, though, will fall on deaf ears if those in the oil, coal and natural gas industries downplay the fears of those who want stronger environmental standards and shared economic sacrifice.

EnergyBiz Insider has been been nominated in 2010 and 2011 for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.

Follow Ken on  www.twitter.com/ken_silverstein

energybizinsider@energycentral.com

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