White House Announces Plans to Modernize Energy Infrastructure

On April 21, the White House announced plans to overhaul the nation's aging energy infrastructure network using key findings from the Department of Energy’s Quadrennial Energy Review (QER), whose first installment was released that same day. The Administration's announcement outlines plans to modernize large portions of the country's energy infrastructure in eight key areas at a cost of $15.15 to $18.85 billion over 10 to 15 years. President Obama also signed two companion executive actions to enhance climate change resilience and to provide loans for six rural infrastructure projects.

The QER is an across-the-board analysis of the country's energy transmission, storage, and distribution infrastructure, which includes the pipelines, railroads, storage facilities, waterways, and of course wires that deliver and store energy. The QER claims the United States has the most advanced energy infrastructure in the world. In total, the United States has, “approximately 2.6 million miles of interstate and intrastate pipelines; about 640,000 miles of transmission lines; 414 natural gas storage facilities; 330 ports handling crude petroleum and refined petroleum products; and more than 140,000 miles of railways that handle crude petroleum.”

But large portions of these 'energy highways' are obsolete because of a lack of appropriate investment. For instance, more than half of the country's gas pipelines were built in the post-World War II economic boom of the fifties and sixties and are outdated or in need of major maintenance. Such obsolete infrastructure is particularly vulnerable to age-induced failure, extreme weather events, terrorism, and cyber-attacks. Compounding these obsolescence issues is the fact that the U.S. energy landscape has seen dramatic changes over the last decade as natural gas replaces coal and renewable energy makes its way onto the market. Large portions of the nation's infrastructure are unsuited to handling distributed, oftentimes intermittent renewable energy sources.

The President’s announcement aims to address all of these issues while increasing safety. His administration is focusing on eight areas for modernization:

1. Increasing the resilience, reliability, safety, and asset security of transmission, storage, and distribution (TS&D) infrastructure ($5.85 to $8.5 billion).
2. Modernizing the electric grid ($3.8 to $3.85 billion).
3. Modernizing U.S. energy security infrastructure in a changing global marketplace ($1.5 to $2 billion).
4. Improving shared transport infrastructure ($2 to $2.5 billion in federal funds and $4 to $5 billion in private funding).
5. Integrating North American energy markets.
6. Addressing the environmental aspects of TS&D infrastructure ($2 billion).
7. Enhancing employment and workforce training.
8. Siting and permitting of TS&D infrastructure.

In addition, the Administration anticipates $4 to $5 billion will be contributed by the private sector to these infrastructure initiatives.

To supplement this announcement, President Obama unveiled two companion executive actions. Under the first one, the U.S. Department of Agriculture (USDA) announced $72 million in loans for six new rural infrastructure projects, which include investments in enhancing rural solar power, smart grid projects, and power lines. The second action creates a private-public partnership to increase energy infrastructure resilience against climate change. There are 17 companies taking part in the partnership and it will quickly be put into action, with the first meeting taking place on April 30.

 

Author: Samuel Beirne