The Future of Power: Realistically Speaking

Published on April 13, 2010

Dynegy CEO Williamson Discusses the American Energy

Pipeline at April’s Sequent Distinguished Leaders Series Event

Dynegy chairman and CEO Bruce Williamson (MBA ’95) spoke about the energy pipeline to a crowded auditorium of students, faculty and members of the UH community at the April Distinguished Speaker Series presented by Sequent.

When it comes to energy policy, there’s a lot of strident rhetoric. But Bruce Williamson (MBA ’95), the chairman and CEO of Houston-based Dynegy, said all that talk isn’t likely to significantly reshape America’s power supply.

Williamson, who heads the Houston company ― one of the largest independent power plant owners, offered his views of “Realistic Perspectives on Energy’s Future” as part of the Distinguished Leader Series presented by Sequent Energy Management.

For some time, efforts to create a U.S. policy debate have been gridlocked by powerful, offsetting interests.

Those voices include environmentalists pushing to phase out fossil fuels because of the emissions, and national security interests calling for energy independence.

Less loud but no less powerful are those who’d like to make sure that whatever gets built is not in their back yard.

Williamson described the camps in the energy policy debate as: “Be Green, Be Balanced or Be Angry.”

“Balanced doesn’t get much air time at either end of the political spectrum,” Williamson said. “We believe all fuels and all technologies need to be used.”

As a result of the unanswered questions about the country’s energy priorities and its environmental laws, not enough money is being invested in new power plants.

“Demand is growing and new supplies are not keeping track,” Williamson said. This is likely to lead to short supplies and higher prices within three to five years in some regions.

While the be-balanced side isn’t getting much notice now, a price spike would put supply growth on the agenda.

The strongest force behind the status quo is: it’s really difficult to alter it.

Regional power supplies are tailored to the most economic energy sources available, conservation and renewable sources of power have their limits; and it would take an enormous amount of money and time to replace what’s here.

“They aren’t going to change much in the next 25 years,” Williamson said.

Dean Arthur Warga, left, presented Williamson with a memento after his talk.

This point of view is backed by projections by the U.S. Energy Information Administration. By 2035 wind and solar power is likely to supply 10 percent of the electricity needed, but coal will remain be the biggest single source of power, with 43 percent of the market.

Houston is likely to be at the center of one area of change – the rise of natural gas. Williamson said the enormous discoveries on gas in shale formations led by Houston companies will increase the share of the electric market held by gas.

“Natural gas is a growing fuel. If there is a bridge fuel out there it will be gas,” Williamson said.

Based on his career as a leader in energy, slow change can be a good thing.

“The current system works. It’s much better to make gradual changes,” Williamson said. “You have to take into account the unintended consequences. Let’s make little changes everyone can agree on and then see what worked.”

During this change Houston – America’s energy capital – will play an important role, as will the University of Houston, said Williamson, who earned his MBA at Bauer College and remains active with the college through his participation in the Dean’s Executive Board.

He pointed out that: “The University of Houston is one of the preeminent energy universities in the country.”

By Stephen Rassenfoss