By Steve Winberg
Chairman & CEO, Net-Negative CO2 Baseloead Power, Inc.
September 28, 2022 - The United States and much of Europe is faced with an energy trilemma. We all understand a dilemma. Pick choice A and suffer the consequences of not picking choice B. A trilemma offers three choices. In this trilemma, the choices are affordable, reliable, or clean energy, all of which are essential to our future. Yet, as a country, we continue to adopt policies heavily skewed toward a narrow definition of clean energy. In the process, the reliability and affordability of energy is being unnecessarily compromised. With 21st century technology, all energy sources can be clean and maintaining energy diversity reduces cost and increases national energy security and energy system reliability.
Biden’s policy targets are zero greenhouse gas emissions from electricity by 2035 and zero economy-wide by 2050. These targets are being pursued with policies which, in the average American’s lifetime, will result in the complete elimination of coal and virtual elimination of diesel, gasoline and natural gas. Natural gas-fired water heaters and furnaces would need to be stripped from homes, gasoline and diesel consuming cars, trucks, trains, airplanes and ships would be largely eliminated; and industry would be forced to all-electric or hydrogen energy. Quite a tall order, by any measure. Simply stated, continuing down this policy path will not achieve either of the Biden targets. What we will achieve is high-cost energy, increasingly unreliable electricity production, loss of energy security and loss of U.S. manufacturing. China, India, Asia and Africa will continue to use fossil energy and graciously sell us what we can no longer afford to manufacture in the U.S., including solar panels, electric vehicle batteries and windmill parts.
Of course, we need only look to our allies across the Atlantic to understand the impacts of a headlong rush to “green” energy. High energy prices, potential energy rationing and, at least for the short-term, a return to reliable, but aging coal and nuclear plants. Yes, a return to coal. Even Germany is restarting coal plants. It’s convenient to point the finger at Putin, and much blame lies with him, but much blame also lies with decades of bad European energy policy. And the Biden Administration is leading us in the same bad direction.
However, it isn’t just bad policy that complicates the trilemma. Numerous environmental groups have kept up a steady drumbeat against fossil energy and it has paid off. They have done a magnificent job! Wall Street, the insurance industry and shareholders have taken up the drumbeat and it is having a profound impact on energy company boards. Environmental, Social and Corporate Governance (ESG) has become the new business fixation, although few can define it. But, not-to-worry, the green-leaning SEC’s Climate and ESG Task Force will define it for us and, then, all will be well. Meanwhile, the fossil energy industry lives in three camps. Camp DenyIt, Camp IgnoreIt and Camp FixIt. Camp DenyIt is mostly abandoned but there are a few stalwarts attempting to make a last stand. Camp IgnoreIt is still well populated. Unfortunately, Camp FixIt is under-populated, underfunded and lacks a cohesive plan.
We can continue to produce and use fossil energy as we have and maintain affordable, reliable energy but we will not make significant reductions in GHGs and most agree that this is no longer an acceptable choice. We can accelerate our energy transition to green energy but cost and reliability will suffer and that will ruin political careers, not to mention our economy and national security.
Renewable energy has been the darling of the environmental community and the proposed answer to climate concerns. For 30 years, we have poured hundreds of billions of dollars of taxpayer money into the renewable energy industry and the recently passed Inflation Reduction Act (IRA) will throw hundreds of billions more taxpayer money at renewables. Yet the renewables industry proudly hails themselves as the lowest cost electricity producer. If they are the lowest cost electricity producer, why do they continue to need taxpayer dollars? In those regions that have accelerated renewable energy projects, they pay the highest electricity prices in the country and suffer from poor electricity reliability. Something doesn’t quite add up.
McKinsey estimates that a global energy transition to clean energy will cost $275 trillion by 2050. How well is this energy transition defined? It isn’t. How will we convert our electricity, industrial and transportation sectors to zero emissions? We do not know. Can our citizens afford Europe’s electricity prices? Are we to rip out all of the residential natural gas furnaces, hot water heaters, stoves and ovens and switch to electric appliances? And then, to add insult to injury, pay higher electricity prices. Where is the social justice in that? Can our industrial sector compete in a global market if they have to scrap their existing fossil-fueled equipment and replace it with electric equipment? Do we scrap every car, truck, plane, train and ship? And where does all the additional electricity come from – intermittent solar and wind power?
Are we inextricably linked to the trilemma of choosing clean energy, affordable energy, or reliable energy, but not all three? No. We, as a nation, can choose to reach a national consensus that we will not relegate any source of energy to the past but, rather, we will use American ingenuity to make all of our domestic energy sources clean, affordable and reliable. The United States has led the world in innovation. In some economic sectors we still lead, but in energy, we have chosen to all but abandon fossil energy technology development and we have an Administration that intends to consign our rich, domestic fossil energy reserves to the past.
Realigning government spending to develop technologies that will allow us to continue to use all of our energy resources will allow us to solve our energy trilemma as well that of other countries. Afterall, climate change is a global challenge, not just a country challenge. We can make energy clean, affordable and reliable but we need to admit that we cannot do so without fossil energy and realign our energy policies around an all-of-the-above energy strategy.
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