Old and New Energy Development Hits the Brakes

Boston is hosting two energy-related conferences this week. One is the giant Green Build expo which is advancing the very successful LEED program, focusing on improving energy efficiency, energy management and materials issues in the construction industry. The other I discuss here is the 4th Conference on Clean Energy, which brings together much of the New England-area venture capital and academic tech transfer communities. Normally a very optimistic and stimulating stage to announce all the new stuff going on in the tech energy space.

While the innovators from MIT and elsewhere have some fantastic new technologies, the lead off speaker began by acknowledging an unruly and very large mammal head on: the elephant in the room. Though anyone with access to the media knows that the global economy is grinding to a halt and that investments and other capital expenditures are way down, it was a bit of a shock to hear it spoken out loud in a forum like this. Talk about boom-bust:

• Most energy infrastructure work (development and maintenance) is stalled ... worldwide
  
• Oil development work in US slowing, stopping
• Russia infrastructure will deteriorate and oil output will decline over next few years
• Only some OPEC countries like Saudi Arabia will continue to spending on their oil infrastructure ... though at a lower rate than in the past
• Investments in the renewables build-out way down as no money is flowing 

Take away: when the economy recovers, there' s going to be even less global oil available than there was when it hit $147 a barrel this summer. And the only country that's keeping its gear in good shape, Saudi, will comprise a larger % share of US oil imports than it ever has. For DOD, this is a very good time to avoid short term thinking if it can.