LC Bulletin: International competition dominates energy industry

June 11, 2010. Retrieved online June 15, 2010 from Gabriel Vasquez, Las Cruces Bulletin

Lack of manufacturing power, research and comprehensive policy hurting United States

In most, if not all panel discussions and keynote speeches held during the 2010 Re-Energize America Conference, energy industry leaders expressed the urgent need to gain a stronger foothold in global energy markets.

The aggressive expansion of national and international alternative energy sectors in countries such as China, France and Germany, are putting a serious dent in U.S. leadership as a global innovator and competitor.

“The rapid pace at which our international competitors are investing in and supporting alternative energy technologies is nothing short of breathtaking,” said Stephen Ward, chief of staff for the office of U.S. Sen. Jeff Bingaman. “There are crucial challenges we have to meet.”

An energy empire

China is rolling out the red carpet to attract international manufacturers to develop new and existing alternative energy products. It is also making billion-dollar investments in research and development, infrastructure and is rapidly deploying new energy technologies for commercial use.

“They’re creating their own markets,” Ward said.

It’s no mystery that China uses a massive amount of energy as the world’s most populous country. The country has emerged from being a net oil exporter in the early 1990s to becoming the world’s third-largest net-importer of oil in 2006. China is also the world’s largest producer and consumer of coal, giving the nation significant importance in world energy markets.

“A recent study reports that over the next five years, the governments of China, Japan and South Korea will invest half a trillion dollars in clean technology industries,” Ward said.

China has also built the world’s largest solar panel manufacturing industry by exporting more than 95 percent of its products to Europe and the United States.

Ward said when an international manufacturer shows interest in setting up operations in China, economic development officials in each specific province will court the companies to the point of sheltered protectionism for China’s economy.

“They’ll take you to a building, tell you that they will build you a building just like theirs, underwrite the funds and infrastructure for the facility, train your people and give you tax credits beyond the horizon,” he said. “They’ll even take orders on the first five weeks of production and install the products on government buildings.”

The world’s largest equipment manufacturer for solar, Applied Materials – an American company – has built the largest solar manufacturing facility in China, Ward said.

“The competition is getting very, very tough,” he said. “We’re seeing a birth of a new era.”

Leveraging U.S. strengths

To better compete in the global market, America must rely on three “pillars” of progress, Ward said: Clean technology research and innovation, domestic manufacturing capacity and the development of domestic markets.

In the energy sector, both private and public funding has remained at low levels for almost a decade.

“This is not a path toward success,” Ward said. “We lack a coordinated, well-funded national clean energy research agenda that can maintain our innovation advantage.”

The ability for the U.S. to invest in new research efforts is realistically impacted by the financial resources the country will have during the next three years.

Read the Las Cruces Bulletin article.

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