The Overwhelming Potential of Alternative Energy

In the last few years, advancements in drilling have enabled the U.S. to surpass Russia and Saudi Arabia as the world’s largest producer of natural gas. In addition, the U.S. now produces more wind and geothermal energy than any other country.

Though alternative energy sources still have a way to go before they can fully compete with traditional energy options, advancements and innovation in alternative energy will reduce our impact on the environment while simultaneously driving significant economic activity along the Intermountain West corridor.

The Intermountain West is full of alternative energy potential — from rich natural gas reserves and highly-active geothermal sites, to abundant solar and hydropower.

In 2013, Utah ranked 10th in the nation for natural gas production, with significant untapped potential. Inspired by the fact that over half of all cars in Brazil are fueled by sugarcane-based ethanol, researchers are exploring methods of using natural gas-based ethanol blends to fuel automobiles in the U.S. Studies show that natural gas-based ethanol blends can propel the majority of cars manufactured in the past decade. Using this fuel blend — which can be conveniently pumped from the same tanks as gasoline is pumped today — would substantially decrease both transportation costs and emissions.

But it’s not just natural gas that shows enormous potential for growth. A 2013 study by the International Energy Agency found that the highest growth in energy — 40 percent — will be in renewables, such as wind, hydro, geothermal and solar, which it estimates will make up 25 percent of all energy production by 2018.

Hydropower is the most developed of renewable energy sources: It fulfills over 7 percent of the nation’s electricity demand. A Department of Energy analysis shows that even without a single new dam being built, hydropower could grow by 15 percent in the coming years as existing dams are retrofitted with turbines. Hydropower is among the cleanest and least expensive renewable energy sources. In fact, Idaho has the lowest electricity costs in the country at $0.06 per kilowatt-hour because 58 percent of the electricity generated in Idaho is hydro.

With a potentially massive wind project proposed for Wyoming and Utah, wind power could begin to compete with hydropower. Wyoming has been developing wind technology for years, but it is difficult to coordinate peak wind times with peak power usage times. An $8 billion proposed project, one of the first of its kind in the world, could send the energy produced by a 2,100-megawatt wind farm in Wyoming to pumps in Vernal, Utah, where air would be compressed into four enormous underground caverns. During peak energy usage time, the air would then be released to spin turbines, and the energy generated would be sent to California. The project would produce 4,000 megawatts — twice as much as the hydroelectric energy produced by the Hoover Dam.

Geothermal production also stands to grow significantly in the near future. The most active geothermal region in the country is the West, with potential sites dotting Idaho, Nevada, Utah, Oregon and California. The Western Governors Association projects that near-term developments in geothermal energy could produce 5,600 megawatts of electricity — equivalent to the combined electrical output of over a dozen coal-fired power plants — while bringing 10,000 new jobs to the economy.

Finally, although it only produced a fraction of U.S. electricity in 2013, solar energy has nearly infinite potential. Solar power’s growth is hindered by high costs but, since 2010, advancements in photovoltaic technology have driven down the cost of panels by 65 percent, propelling more widespread residential and commercial use of solar panels. Increasing demand in the solar industry will strengthen job growth throughout the region because the second-largest solar provider in the United States, Vivint Solar, is headquartered in Provo, Utah.

Continued advancements in alternative energy technology offer positive implications for our environment, and the Intermountain West region is uniquely positioned to capitalize on these innovations. Growth in alternative energy can significantly strengthen the Intermountain West’s economy while simultaneously supporting the global environment.

This post is part of an ongoing series of data-driven commentary on current events. It was originally published in the Zion’s Bank Economic Outlook Newsletter and the Deseret News.