Up until now I think the emphasis has been on energy efficiency. I don't have any strong data to support my comments, but at some point the easy things to do will have been done. In the energy efficiency playbook, the things that might be the next incremental efficiency gain will also be more expensive because you've done the easy things. As that begins to happen, then the focus and the shift will be more on what are the other things we can do which will bring alternative energy more into focus.
If the price of oil drops, do you think the emphasis on alternative energy will go away?
The thought is that the natural business rhythm around people's interest in alternative energy peaks when the price goes up. Unfortunately, it wanes when the price goes down. I guess it depends on the length of those dips and in the magnitude of the dip. I guess we feel that the pressure on resources of all kinds is likely to continue to increase with time. This nexus of energy, food and water and the connectivity there will continue to put a lot of pressure on energy.
Having said that, however, look at the seemingly unending sources of more traditional energy that people are finding, like shale gas, etc. It puts price pressure on the alternatives.
The crystal ball in this area is not very clear, but one of the issues may be [establishing the real cost of carbon emissions]. If in fact the research in climate change advances to the point where people can make more definitive statements about the anthropogenic causes, maybe that will become a driving factor for alternative sources before we run out of them or the price difference changes.
The true pricing of the carbon component of fossil fuels is not there today. Maybe if people begin to look at the true pricing, that will change the equation.
That's my read for the future. A penny saved is a penny earned, and I know efficiency work falls into that category.
Ray Johnson
Chief Technology Officer, Lockheed Martin
Education: B.S. in electrical engineering from Oklahoma State University. M.S. and Ph.D. from U.S. Air Force Institute of Technology.