from Greenberg Center for Geoeconomic Studies and Energy Security and Climate Change Program

The Tech-Enabled Energy Future

Transition by Design

NuTonomy’s driverless car, the first to launch in Boston, takes a spin around Drydock Avenue in South Boston, on January 4, 2017. Jessica Rinaldi/The Boston Globe/Getty Images

A new wave of energy innovation is remaking the transportation, electricity, and manufacturing sectors. This so-called fourth industrial revolution is already creating great uncertainty about the future energy landscape, lessening common interests between oil-producing nations and the world’s largest economies.

March 08, 2019

NuTonomy’s driverless car, the first to launch in Boston, takes a spin around Drydock Avenue in South Boston, on January 4, 2017. Jessica Rinaldi/The Boston Globe/Getty Images
Report

Overview

Energy innovation is a vital U.S. national interest. The current rapid pace of digital innovation in energy—in particular, advancements in on-demand travel services, self-driving vehicles, big data-assisted logistics, newly automated and decentralized electricity systems, and three-dimensional (3-D) printing—is remaking the transportation, electricity, and manufacturing sectors. This so-called fourth industrial revolution could sharply reduce oil use, lessen the influence of geopolitically problematic oil-producing nations, and promote electricity system resiliency to severe weather. Leading in energy innovation contributes to U.S. global competitiveness—not only in spurring new markets, industries, and companies, but also in producing more cost-effective supply chains, boosting manufacturing productivity, reducing the economy’s energy intensity, and lowering the costs of addressing climate change.

Amy Myers Jaffe

David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change

However, volatility in U.S. public research and development (R&D) spending, as well as fluctuating government incentives for advancement of products like electric and self-driving vehicles, solar energy, and 3-D printing, has contributed to uncertainty about the scale and timing for a transition to new technologies. This high unpredictability is creating difficulties for oil-exporting countries like Russia, Saudi Arabia, and Venezuela and has lessened their common interests with industrialized nations like the United States.

More on:

Energy and Environment

Technology and Innovation

Electric Power

Industrial Policy

Robots and Artificial Intelligence

As these technologies proliferate, the U.S. government—at federal, state, and local levels—needs to intervene and steer markets to avoid unintended consequences and prevent suboptimal outcomes. Otherwise, the potential of these technologies to reduce oil use, improve energy infrastructure resilience, and enhance U.S. competitiveness could go unrealized, or even contribute to a worsening of ill-effects such as congestion and emissions.

Sound public policy is needed to guide emerging technologies to benefit society. As companies craft strategies to unleash the power of sensors, big data, artificial intelligence, the Internet of Things, automation, and smart devices in the energy and transportation sectors, policymakers need to consider how to promote practices that harness these technologies in a way that optimizes a geopolitically and environmentally beneficial transition. Regulatory policies that ensure that digital energy innovation enhances national goals for security and environmental protections, instead of worsening current problems, will be important. How the United States deals with these issues could determine its future leadership in global technology.

More on:

Energy and Environment

Technology and Innovation

Electric Power

Industrial Policy

Robots and Artificial Intelligence

Top Stories on CFR

Australia

Iran

Neither Iran nor the United States likely wants war, but the possibility of a miscommunication is considerable, risking a dangerous escalation.

European Union

Populist parties are looking to make big gains in European Parliament elections. That could disrupt EU policy on issues from trade to migration.