The United States has become a worldwide energy powerhouse and is poised to make even greater strides. There are ample reasons to be optimistic about America’s energy future, though a host of political risks threatens our vast economic and environmental gains.
The Green New Deal has commanded attention because of its audacious attempt to end fossil fuel consumption within 10 years. But today, state policymakers including governors and utility commissions, pose a far greater threat.
First, the good news.
In January, the U.S. Energy Information Administration announced that the United States will become a net energy exporter in 2020, for the first time since 1952. The United States is expected to stay an exporter for 30 years due to “large increases in crude oil, natural gas, and natural gas plant liquids production.”
This means America’s energy boom will continue to create skilled jobs on top of the millions already produced. Our balance of trade improves, and energy prices remain affordable and stable, thereby stimulating energy-intensive industries like manufacturing. We are also far less likely to be drawn into wars over oil.
The future of the Green New Deal is uncertain at best. Some Democrats, like House Speaker Nancy Pelosi, have seemed to brush it off or pivot by saying what is important is the vision of the legislation. Meanwhile, Republicans are salivating over this issue.
What is certain is that there are many developments at the state level that would overhaul how electricity is generated and consumed. Some are positive and others are not. The key ones follow.
—Support for Nuclear Power. Nuclear power accounts for approximately 20 percent of U.S. electricity generation and remains by far the largest source of carbon-free electricity. As a 24/7 baseload power source that consistently contributes power to the grid, it is essential for electricity reliability. New York, New Jersey and Illinois have made modest subsidies of $2 a month or so to keep plants operating so that emissions stay low and that the vast economic benefits of these plants continue.
—Grid modernization. America’s electric grid is getting old. A 2015 U.S. Department of Energy report found that 70 percent of power transformers and transmission lines are 25 years or older. Utilities are investing $50 billion annually into electric distribution systems and many experts believe much more will be needed.
How investments are prioritized will be critical for protecting consumers, meeting increased electricity demand and fortifying the grid against severe storms.
—Vast renewable subsidies. In many places, renewable energy continues to be quite costly and renewable energy subsidies can quickly get out of control. In Virginia, the State Corporation Commission reported that a wind energy plan would have cost 78 cents/kilowatt hour, 26 times the market price. Wisely, the plan was halted. New Yorkers are paying $2.1 billion for a wind energy plan, but few in the state will have access to the power.
As states like New Jersey consider ambitious wind energy and other renewable programs, cost transparency is critically important. Offshore wind facilities can be especially high-priced because of the initial construction costs. Also, significant engineering changes and improvements need to be made to the transmission grid so it can receive this power.
—Cost obfuscation. Many consumers have line items in their electricity bills for renewable energy costs. Some are clearly identified, others are not. Going forward, utility commissions in their decisions, and utilities in their bills to consumers, should be clear and explicit about all such subsidies.
—Support for Electric Vehicles. There are many benefits to significantly increasing the number of electric cars in America, powering them from cleaner natural gas, nuclear and renewable power. But a sharp growth in electric vehicles is likely to mean a sharp increase in the amount of electricity needed. As such, public policy should be to keep and expand our clean sources of electricity.
The United States has come a long way from the 1970s era of oil embargoes, high energy prices, and gruesome air pollution. By avoiding rash and hysterical actions, we will have a cleaner and more prosperous country.