Politics is Sabotaging US Energy Policy
The US' Left/Right Political Infighting Makes Energy More Expensive and Less Green
Hey Joe, where you goin with that pen in your hand?
I’m going to Texas to wreck US oil and gas, anyway I can.
(Adapted from Jimi Hendrix’ Hey Joe)
Ok, it’s not entirely fair to blame prevailing gasoline prices of $4 plus per gallon on the current US president. But equally, the Biden team has veered quite a long way from the “all of the above” energy policies of the Obama administration of the previous decade.
Perhaps the most consequential change: US produced natural gas is now increasingly considered part of America’s energy and environmental problem, rather than a part of the solution.
As the initial lead architect of Obama’s energy policy, Dr. Stephen Chu shifted the focus of the US Department of Energy toward research and development of new technologies. Renewable energy was a big part of that. But DOE also pursued ways to improve efficiency and environmental quality of conventional sources, including cleaner coal, new nuclear and domestic oil and natural gas production.
Those efforts coincided with the deployment of shale technology that made previously uneconomic oil and gas both cheap and abundant. And other Obama agencies like the Federal Energy Regulatory Commission responded by greatly streamlining the approval process for building new infrastructure including long haul oil and gas pipelines.
The result was for the first time in most Americans’ lifetimes, the nation became a net exporter of energy, rather than an importer. In fact, the shale revolution was so successful, it basically sowed the seeds of its own demise, creating conditions of chronic over supply and a six-year plus energy bear market—that only bottomed when North American oil prices actually went negative in April 2020.
We Americans, however, reaped the benefits from years of low cost natural gas for heating, as well as gasoline and jet fuel for travel.
And if anything, the positive environmental impact was even greater.
It’s easy to forget now. But in the mid-00s, US electricity producers had plans in various stages to build more than 100 major coal fired power plants—in large part to replace a decades-old fleet of facilities coming to the end of their natural lives.
Only two actually went into service. The reason was cheap natural gas.
For more than a decade, utilities and other power producers have been able to replace their coal-fired plants with natural gas fueled facilities, cutting operating and fuel cost while eliminating emissions of particulate matter, acid rain gases and mercury.
Using gas rather than coal has cut companies’ carbon emissions by up to 50% as well.
Meanwhile, rising American exports of liquefied natural gas (LNG) has further boosted local industry and the country’s trade balance by helping other countries wean off of coal. That includes China, now the world’s largest emitter of greenhouse gases and now a major LNG importer from this country—following former President Trump’s Phase One trade agreement.
Swapping gas for coal is easily the single biggest reason the US has been able to greatly reduce CO2 emissions over the past decade. And it’s still the single fastest and most effective way this country can make further meaningful progress.
Unfortunately, the politics of energy absolutism is now ascendant. And the more its influence has grown, the lower the odds of sensible, pragmatic solutions to the challenge of providing affordable and environmentally sustainable energy have become.
Discerning Americans by now are acutely aware that the majority of the public gets much of its information by algorithms. When it comes to politics, that means either the progressive/liberal silo or the conservative/right silo. The ethos is you’re either with us or against us, a premise that greatly restricts the promise for intelligent dialogue that might lead to rational solutions on important issues.
During the Obama administration, energy managed to mostly avoid the political realm—as a subject considered best left to those who understand the technicalities. But first under Trump and now Biden, it’s become the stuff of silo discussions—with each “side” using events of the day to support their side of the “argument.”
For progressive/liberal orthodoxy, global warming means use of all fossil fuels must be ended yesterday, and even then it may be too late to prevent catastrophe. For the conservative/right silo, climate change may be real, but its real threat is chronically exaggerated by the progressive/liberal left to further socialist aims and expanding government power.
Both “sides” see the other’s views as inherently dangerous if not certifiably crazy. And the result is a challenge—one that does require technical know-how to find workable solutions— but which is currently being addressed with anything but.
So what is to be done?
A great first step would be for adherents of both silos to tone down the rhetoric. Unfortunately, silos are all about hyperbole, as that’s how they get clicks—which is a major reason why Substack as an open forum for ideas is so important right now.
But it’s critical for those who get information from silos—and I include The New York Times as well as Fox News—to step outside into the fresh air once in a while to watch and listen to other points of view.
Unfortunately right now, energy policy has become intensely political—which means politicians are leading the dialogue. And most know little or nothing about energy, other than what click bait they’ve come across from the loudest voices on the subject. But there are places in plain view where an individual can look to find out what’s actually happening.
One is to simply observe what the industry is doing.
Did you know the world’s single biggest producer of wind and solar energy is a Florida-based electric utility called NextEra Energy?
Did you know NextEra had a target of installing 30 million new solar panels by 2030, a goal it now expects to achieve by 2025?
How about that this buildout will actually cut customers’ rates by $2.5 billion?
By the way, Florida residents’ electricity rates are less than half California’s—where the government has taken a lead role pushing renewable energy, while Florida’s approach has been to stay out of the way and let the pros do the job.
NextEra is far from alone as an example of how wind and solar deployment can be done while actually making energy more affordable—if well-run companies are supported rather than publicly vilified and regulated to death. And they make investors rich in the process, which encourages more investment—the very definition of a virtuous cycle.
Maybe it’s not a clickbait story—my own recent piece on forbes.com about NextEra’s success only got a few thousand views, though it did appear on Bloomberg Intelligence.
But if we are going to have successful energy policies, we’re going to need more Americans to look beyond the clickbait.
Promoting that process is my personal Substack goal when it comes to energy—an industry I’ve been involved with professionally since the mid-1980s—conventional, renewable and future.
Look for more in this publication and thanks for reading!