Beyond Cape Wind

FILLING UP at the gas station has taken on new significance this summer as gas prices hover around $3 a gallon. High energy prices have long contributed to the cost of living and doing business in Massachusetts. But now, as the crunch seems to be getting worse, energy could represent not only a challenge for the Commonwealth but also an opportunity.

The nascent gold rush for next-generation energy technology could become an economic engine for Massachusetts, one that deserves a place alongside the much-trumpeted biotech sector. But that is only if the state's civic and business leadership gives the field the attention it deserves.

Advocates have been banging the drums about climate change for years and about energy conservation for decades. However, a number of factors are now coming together to make energy technology take off.

Crude oil prices have seemingly gotten stuck at nearly triple their average price of three years ago. Home heating oil and natural gas prices have also tracked upward. Robust economic growth in China and India -- along with instability in many oil-producing nations -- makes it likely that high prices are here to stay.

At the same time, regulation of greenhouse gases is beginning to arrive. Northeast and mid-Atlantic states have come together to form a regional initiative focused on carbon dioxide emissions from power plants. Though it has its own regulations, Massachusetts has declined to participate in the new pact. Nonetheless, our neighbors are moving forward, with or without us, as are several other states around the nation.

On the international level, the Kyoto Protocol entered into force as a treaty last year. Though the United States did not sign on, this agreement binds Europe and many other industrial countries to curbing these emissions. This host of new regulations sends an increasingly clear signal to the market to develop new energy technologies.

The results of the Commonwealth's 1997 utility restructuring are also now being felt. One lesser-known part of utility restructuring is the Massachusetts Renewable Portfolio Standard -- the requirement that an ever-increasing share of the state's power mix come from renewable sources. That provision offers significant financial incentives for projects like Cape Wind and a host of others.

All this suggests that change is coming in energy technology. Globally, trillions of dollars will be spent as energy infrastructure gets updated, augmented, and replaced with more-efficient technologies, new fuel types, and cleaner power production. Jobs and wealth will be created in this process -- and Massachusetts should be part of the action. With its preponderance of venture capital and private equity, a skilled workforce, a history of leadership on environmental concerns, and some of the world's leading centers of innovation and invention in our universities, the state is well positioned to cash in on the coming energy revolution. It's no accident that MIT's first big initiative announced by president Susan Hockfield soon after she took office last year was an expansion of energy research.

There is already important leadership coming from the Massachusetts Technology Collaborative. Through grant funds and loans, the collaborative is helping to move new Massachusetts energy tech companies to commercial projects. However, the collaborative's portfolio is limited by statute to renewable energy. The next generation of energy technology will be broader than that, involving such things as new transportation fuels -- witness the newfound interest in ethanol and biodiesel -- and energy-efficient consumer products. The state's engagement with this emerging energy technology cluster should be broadened and elevated.

There is plenty of opportunity in the energy field, and the civic and business communities should be engaged. The life sciences don't represent the only economic opportunity in the state. Massachusetts already has 10,000 jobs in energy efficiency and renewable energy.

In California, the debate is raging -- with ideas good and bad, small and large, floating about, including a proposed $4 billion ballot initiative to tax oil and fund alternative energy. Regardless of the merits of that particular proposal, no discussion of similarly big ideas is underway in Massachusetts. Here, you are either for Cape Wind or against it, and that is about as far as it goes. If that's the way it stays, Massachusetts will miss the energy technology boat.

Ian Bowles is president of MassINC and publisher of CommonWealth magazine.