Monday, Jun 10, 2024

Hope for a More Rational Energy Policy

Soaring oil and natural gas prices. Electricity grids on the brink of failure. Energy shortages in Europe and the US. But there is hope. Some liberal political leaders are finally beginning to recognize that, despite the doomsday climate change rhetoric that dominates popular culture and government policy, the cold hard fact is that the world will need carbon-based fuels to provide most of its energy needs for decades to come, and that the US and its allies in Europe will need to find new and more reliable sources of fossil fuels to remain prosperous and free.

Here are some of the costliest consequences of today’s excessive climate regulations, green energy subsidies, and impractical greenhouse gas emission mandates:

The operator of Texas’ electric grid has warned state residents to cut down on the use of major home appliances and air conditioners this summer to avoid rolling blackouts amid a heat wave that has brought the generation of electricity from the wind turbine farms in West Texas to a near standstill. The same problem contributed to a disastrous week-long power outage in Texas amid freezing temperatures in February 2021.

The North American Electric Reliability Corporation has warned that two-thirds of the nation could experience electrical blackouts this summer. The reason is painfully obvious. Over the past decade, overly strict environmental and carbon emissions regulations, combined with the remnants of Cold War-era paranoia over safety of nuclear reactors, has undermined the reliability of the nation’s power grid and destroyed America’s hard won energy independence.

In California and Texas, for example, in recent years, elected officials have forced the premature retirement of safe and efficient nuclear reactors as well as generators running on cheap and relatively clean-burning domestic natural gas, which had been generating about a third of their electrical power. They were replaced with unreliable sources of renewable energy that have proven to be unable to meet those states’ power demands, especially during periods of extreme weather.


This premature transition to green energy sources has sent energy costs soaring nationwide. According to the federal Energy Information Administration, wholesale prices for electricity during peak usage times are expected to more than double this summer due to shortages — not only in Texas and California, but also in the Northeast, Mid-Atlantic States, and the Midwest, areas of the country which, before their forced transition to renewable energy sources, used to have plenty of excess generating capacity. While consumers have been partially shielded from the rising energy costs by state limits on utility rate increases, the retail cost of electricity in Texas’ deregulated power market has risen by 70% over the past year.

Part of the problem with the power grid in Texas is the regulatory priority that was given to the heavily subsidized wind farms in West Texas. After former Republican Governor Rick Perry ordered the construction of new transmission lines to distribute the wind power across the state, it pushed down the wholesale cost of electricity so far that coal and nuclear-powered plants could no longer profitably compete, causing many of them to close down. That left the state without adequate power reserves in very hot or very cold weather, when the wind in West Texas stopped blowing and generating electricity.

Even though American consumers have yet to experience the full increase in the cost of electricity, unless local utility rates are allowed to rise to meet actual wholesale power costs, the local utility companies will be forced into bankruptcy, as has already happened in several European countries in response to last summer’s energy shortages due to the catastrophic failure of their green energy wind turbines. As a result, the governments of Germany and Great Britain are being forced to nationalize their privately owned electrical utilities, and France has recently reversed course and is now seeking to expand rather than phase out its nuclear power stations which currently produces 70% of that nation’s electricity.


The dramatic recent failures of “green energy” substitutes in the US and Europe is evidence that the goal of climate change activists to eliminate the use of fossil fuels is just not practical using current renewable energy technologies. The world currently gets almost 80% of its energy from fossil fuels. According to the International Energy Agency, even if the current net-zero climate policies were to be fully implemented by 2050, fossil fuels would still have to provide more than half of all worldwide energy needs.

Current green energy technologies are clearly not yet sufficiently affordable or reliable, and the new technologies needed to complete a transition to renewable energy sources have not yet been fully developed or proven.

The artificially elevated cost of natural gas has also had a major impact on manufacturing. In response, some US steel and aluminum producers have idled their plants and are publicly urging the Biden administration to halt a planned massive increase in exports of US-produced liquified natural gas (LNG) to Europe to replace Russian supplies. Natural gas is also a main ingredient in the manufacture of synthetic fertilizer, and extremely high natural gas prices had already resulted in a global shortage of fertilizer and sharp increases in grain prices even before Russia began its blockade of Ukrainian grain exports from the Black Sea port of Odessa.

The European energy shortage is expected to get worse at the end of this year, when an EU-wide embargo on Russian oil is scheduled to go into effect. There are also fears that Vladimir Putin will take his revenge against Western sanctions by reducing the flow of Russian natural gas, which currently supplies 40% of the continent’s energy needs. To reduce Germany’s heavy dependence on Russian natural gas, its government has now launched a crash program to build LNG import facilities along the Baltic coast in anticipation of increased American supplies.


Quickly expanding the production and export of America’s huge proven reserves of natural gas is the most feasible response to the current global energy shortage. But counterintuitively, the Biden administration is still resisting granting new drilling leases for natural gas on federal lands, as its EPA seeks to impose strict new limits on methane gas emissions intended to further hobble domestic natural gas exploration and production.

Also counterintuitively, the German government reacted to the expected energy emergency later this year by restarting its carbon-emitting coal-burning generators, rather than extending the operational life of the country’s last three nuclear power plants, which currently supply 6% of Germany’s electricity. The reactors produce no carbon emission, and have been operating safely for decades, but in response to demands by leaders of the country’s Green Party, they had been scheduled for retirement before the end of this year.

German political leaders are now reconsidering that illogical decision. They have proposed an odd compromise with Green Party activists who play a critical role in the current coalition government. In return for agreeing to allow the three nuclear reactors to keep generating clean, cheap electric power, the government would impose a speed limit on Germany’s autobahn superhighways, which has long been a symbolically important goal for Germany’s liberal environmentalists.


Meanwhile, Ursula von der Leyen, the president of the European Commission (the executive body of the European Union), announced plans for EU countries to voluntarily reduce their natural gas consumption by 15% over the next eight months, in anticipation of the likelihood that Vladimir Putin will further cut Russia’s natural gas exports to Europe.

Putin temporarily shut down Russia’s original Nordstream gas pipeline for normal maintenance work a few weeks ago, prompting fears that he would keep it closed in retaliation for the sanctions EU countries imposed on Russia for invading Ukraine. The EU also reported that in June, before the pipeline was shut down for maintenance, it provided less than 30% of the usual volume of natural gas compared to past five years. But Putin announced last week that Russia would fulfill its commitments to supply natural gas to Europe, while warning that supplies might be reduced because of the Western sanctions. Nevertheless, von der Leyen told a news conference, “We have to prepare for a potential full disruption of Russian gas,” which she noted is still “a likely scenario.”

The International Energy Agency agreed last week that Europe is now operating “in a constant state of uncertainty over Russian gas supplies,” including the possibility of a complete cutoff.

If the voluntary cuts in natural gas do not materialize, the EU plan calls for giving financial incentives to companies as a reward for using less natural gas, and imposing mandatory limits on heating and air conditioning in public buildings, as well as establishing priorities for the rationing of available supplies of natural gas to industries if there isn’t enough to go around.

But despite these plans, the scheduled voluntary European cutoff in Russian energy imports will inevitably throw Europe’s economy into a deep recession.


Europe is currently enduring another brutally hot summer, setting new records across the continent, and causing an estimated 1,700 heat-related deaths in Spain and Portugal. Relief from the heat is also hard to find in countries like Great Britain, where air conditioning is less prevalent because residents have come to expect cool, rainy summers.

The inescapable fact is that most ordinary people need cheap and reliable energy to be able to afford air conditioning in the summer and adequate heating in the winter.

Rising fossil fuel prices are also making food more expensive. Synthetically produced fertilizer has been a boon to worldwide agriculture, and enabled it to feed the world’s growing population. But because natural gas is one of the main ingredients in the production of that fertilizer, soaring gas prices due to climate-change inspired restrictions has severely reduced the production of fertilizer. The shortage of fertilizer, in turn, is likely to result in worldwide crop shortfalls that could put almost a billion people at risk of starvation.

However, the prospect of mass global starvation and the dire economic and national security consequences of the premature abandonment of fossil fuel energy has made no impression on the liberal elites. They continue to push their climate change agenda to prevent what they claim will be a global warming disaster 30 years from now.


In fact, the media’s focus on heat-related deaths is misleading. Worldwide, half a million people die each year from extreme heat, compared to more than 4.5 million people who die from extreme cold. This leads to the surprising conclusion that if global warming does materialize, it will probably result in a net saving of lives due to a reduction in the much larger number of people who annually freeze to death.

A recent study published by Lancet, the British medical journal, concluded that, based upon the global warming between the years 2000 and 2020, rising temperatures were causing 116,000 more heat deaths annually, but also 283,000 fewer cold deaths a year.

The global cost of achieving the liberal goal of net-zero carbon emissions by 2050 is estimated by the McKinney consulting firm at more than $5 trillion annually for the next three decades, which would not be politically sustainable in Western democracies. In addition to the intense political pressure on the Biden administration due to soaring prices at the pump, there were public protests held in June by 40,000 farmers in the Netherlands against new environmental emissions standards for farm animals that would devastate the country’s highly productive agricultural industry during a time of rising global hunger.


The ultimate example of environmental policy gone horribly wrong has taken place in the island nation of Sri Lanka, off the coast of India. In response to pressure from organic food activists and the World Economic Forum, Sri Lanka banned the use of synthetic fertilizers in April 2021, which soon resulted in the collapse of its domestic agriculture, soaring food prices, and the default of its national currency. Sri Lanka’s hungry and outraged citizens launched nationwide protests and overran the presidential palace, forcing the government to resign and the president to flee the country.

Because Western European countries have sacrificed so much of their energy resources in the futile pursuit of an unrealistic net-zero carbon emissions goal by 2050, they currently lack sufficient fossil fuel-based electricity to respond effectively to the current heat emergency, this winter’s freezing temperatures, and Vladimir Putin’s energy blackmail.

There are real political risks entailed in the premature government-forced adoption of politically correct but impractical technologies. Frans Timmermans, the European Commission’s vice president, has warned that because of the abandonment of fossil fuels, millions of Europeans may not be able to heat their homes this winter, which potentially could lead to “very, very strong conflict and strife.”

The Sri Lanka example also demonstrates how the disconnect between the incredibly expensive climate change policies being pushed by the liberal elites and the priorities of ordinary citizens is likely to have very serious real-world consequences.


Another irony is that no matter how much the US and Europe cut their current carbon emissions in the years ahead, greenhouse gas emissions will remain out of control because China, which is the world’s largest emitter of greenhouse gases, as well as India, which is number three in emissions behind the US, are continuing to build large numbers of coal-fired generating plants.

Beyond the devastating impact of the artificial energy shortage on Western economies is the tremendous economic boost and diplomatic leverage their fossil fuel resources have given to some of the world’s most notorious dictators, including Russia’s Putin, Venezuela’s Nicolas Maduro and Ayatollah Khamenei, Iran’s supreme leader.

According to the International Energy Agency Russia has earned more than three times the revenue in would normally receive from energy sales to Europe in the five months since Putin invaded Ukraine, compared to a similar period in a normal year.


One of the few available and proven zero-emission energy technologies that can be scaled up to replace fossil fuels is nuclear power. Commercial electric power reactors have been in widespread use across America since 1957, with a remarkable record for safety, reliability, and efficiency.

However, anti-nuclear activists have spent decades fomenting exaggerated fears about atomic power. Those fears were reinforced by the 1979 reactor accident at the Three Mile Island power installation in Pennsylvania. The Nuclear Regulatory Commission (NRC) called Three Mile Island the most serious accident in “US commercial nuclear power plant operating history, even though it led to no deaths or injuries to plant workers or members of the nearby community.” Public reaction to the Three Mile Island accident significantly increased opposition to new nuclear power reactors across the country, and new safety regulations imposed upon them as a result of the accident increased their construction costs to the point that they were no longer economically competitive with oil and natural gas-powered generating stations.

But during the decades that followed, the nuclear reactors already in service continued to operate safely and reliably. They provided about 20% of America’s electrical power, and 17% of global power production. By the early 2000s, interest in the construction of new reactors was revived by the global concerns over carbon dioxide emissions, but the decades-long slowdown in new reactor construction meant that there were few workers still in the labor force with the skill and experience needed to meet the higher safety standards now required. This resulted in long construction delays and serious cost overruns for the new generation of reactors.

Serious nuclear power safety questions were raised again by the 2011 Fukushima Daiichi disaster, which was caused by a tidal wave which cut off the electrical power supply to the Japanese reactor’s cooling system, causing three core meltdowns and widespread nuclear contamination. Japan and Germany reacted to the Fukushima disaster by deciding to phase out the operation of all of their nuclear reactors. In the US, 12 nuclear reactors have been closed since 2012.


But Russia’s invasion of Ukraine has prompted a serious reconsideration in Europe of the zero-emissions and high reliability advantages offered by nuclear power, over continued heavy reliance on fossil fuels from Russia. For example, the European Union recently decided to reclassify nuclear reactors as “green” energy sources, making them eligible for billions of euros in government subsidies for new construction.

France, which had recently considered shutting down 14 of its 58 commercial power reactors because of Fukushima-inspired safety fears, has reversed course, and is now planning the construction of new reactors using next-generation designs. Belgium has also decided to extend the operational life of its remaining two reactors by a decade. The Dutch government is moving toward construction of two new nuclear plants, Poland is building its first nuclear reactor, and the Czech Republic is now planning to build several of them.

Japan has also reversed course. It has already started work to bring nine of its retired reactors back online by this winter, and restarting another 30 closed reactors to help it to meet its 2030 reduced carbon emissions goals.

Even the Biden administration has become more friendly towards nuclear power in the wake of the invasion of Ukraine. In April, President Biden announced $6 billion in federal funding to help nuclear plants such as the last reactor in California, at Diablo Canyon, continue to safely operate for years to come. Private investors and government agencies are pouring billions into a next-generation nuclear concept called small modular reactors, which are inherently safer and more efficient than current designs. The first commercial small modular reactor design has already been approved by the NRC, and several other new designs are currently under construction at the Idaho National Laboratory.

A recently published report by the International Energy Agency concludes that the “policy landscape is changing, opening up opportunities for a nuclear comeback.” Government leaders around the world have begun to realize that they can’t simultaneously meet their carbon emission, energy, and national security goals without reviving their abandoned nuclear energy programs.


Wall Street Journal columnist Helman Jenkins suggests that the imposition of a carbon tax would be a much fairer and more effective way than current federal government policies to reduce greenhouse gas emissions. The tax would impose a fair price on continued fossil fuel usage and discourage climate change activists from trying to sabotage every effort to make the United States energy independent once again.

As Jenkins explains, “Under a carbon tax, the oil and gas industries, and even more crucially their infrastructure suppliers, would have been free to invest to bring us all the energy we want at the prevailing, after-tax price without running a gauntlet of environmentalists trying to shut them down.

“The price mechanism would do the work of limiting emissions and [stop the] pernicious activists in and out of government… trying to sandbag a drilling project here, a pipeline investment there…

“What’s hurting America today is not a lack of resources. It’s a lack of pipelines, a lack of refinery capacity, a lack of liquefaction capacity, ships, and other supporting infrastructure to move energy supplies to meet booming demand.”

Jenkins claims that with the imposition of a reasonable carbon tax, “we would have a sounder economy. We would have a stable, predictable incentive to produce less CO2 while satisfying our energy needs more reliably and cost-effectively than under the prevailing confused and politicized energy policies…”

Another advantage of the carbon tax is that it would treat every energy-related business equally, ending the ability of liberal elected officials to provide more government handouts to their politically well-connected friends, and provide a financial incentive for all energy-related industries to cut their carbon emissions in the most efficient way.

Jenkins is not a climate change true believer. He writes that “climate change is not the end of the world, and the science never said it was.” But his column reminds us that it is possible to fashion an energy policy that effective addresses the climate change problem on its own terms, without destroying the free economies and energy security of America and its European allies.



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