Reflections on Short-term vs. Long-term Thinking on Energy Policy

In this post U.S.-election period there are many articles on what to expect from the U.S. Congress now that Republicans will control both Houses of Congress for at least two years after January 20, 2015. After reading quite a few of them, and authoring one in a recent blog post (‘What Might the 2014 Elections Mean for U.S. Energy and Environmental Policy’), my thoughts turned to the conflict between short-term and long-term thinking in the formulation of energy policy. In particular, I am reminded of the observation by Kevin Phillips, former Republican strategist and then registered Independent, in his 2006 book ‘American Theocracy’, as paraphrased in one of several reviews of his book: “His objective historical notes about previously fallen Empires involved several historical facts that have occurred to other great powers in the past: global usurpation, religious intransigence, debt, and dependency on resources that are *outside* of the nation…..it’s a truthful observation based on statistical facts, not necessarily just opinion. And, it’s a concept that happens to ALL empires over the course of world history.”

In his discussion Phillips refers to the fall of the Roman Empire, but also more recent examples of previously-dominant nations that relied too long on particular energy sources as other resources became available and strategically important. He cites the Netherlands and other maritime nations for dependence on wind energy in the 1600’s, the British dependence on coal in the late 18th and early 19th centuries, and the U.S. dependence on oil in the 20th century. These points have stuck with me ever since.

U.S. dependence on oil and other fossil fuels (coal, natural gas) in these early years of the 21st century is still extensive, and many vested interests with short-term perspectives are understandably fighting hard to maintain this status quo. Economic self-interest, rather than long-term national interest, is a powerful force and few champions exist in the U.S. Congress for a longer-term perspective. This is fully understandable from a political point-of-view when the next election is only two or fewer than six years away, and politics today is overly-dependent on private campaign contributions. However, this is survival, not leadership, and many if not most of our elected representatives take the easy way out by voting for short-term rather than long-term solutions to our nation’s energy problems. To this observer it seems clear that a transition to a clean energy society is an imperative for the U.S. and other countries, and the faster this transition occurs the better.

As with any transition there are winners and losers, and the U.S. fossil fuel industries feel deeply threatened by potential loss of markets, as is already happening in the coal industry. This will happen in the oil industry as well, as U.S. demand for oil is steadily reduced by more energy-efficient transportation vehicles, and despite the emergence of oil derived from fracking of oil shale deposits. This will also be true of natural gas from fracking, as fracking is likely to be a few decades phenomenon and not a long-term energy resource. On a global basis this transition will be stretched out as developing countries require energy supplies now as their economies develop (e.g., increased demand for cars/transportation fuels in China and India), and renewable energy supplies are developing their ability to meet this growing and long-term demand in an environmentally sustainable way.

Looking beyond self-interest for most people is not easy, and requires champions – i.e., people with a long-term vision of the future (the ‘vision thing’ again, as derisively characterized by President H.W. Bush) who are willing to stick their necks out to propose policies that may have short-term political liabilities. Examples are Lincoln’s decision on Emancipation, Teddy Roosevelt’s protection of the environment and his battles against corporate irresponsibility, FDR’s push for Social Security legislation and banking reform, Truman’s racial integration of the U.S. military, LBJ’s support of civil rights legislation, and Obama’s push for health insurance for millions of previously-uninsured Americans. His recent push for stimulating renewable energy production and reducing U.S. carbon emissions may fall into this category as well.

To be truthful, I see no national leaders post Obama who are naturals to serve this role on energy and environmental policy. Few, if any, Republican politicians are willing to buck the right wing of their Party on energy and other issues, largely out of fear of right-wing primary challenges, and no Democratic leader has assumed this mantle in conspicuous ways. Even Hillary Clinton’s priorities on energy and environmental policy are unclear, despite years in the public limelight, due to her extremely cautious approach to an announcement of her interest in the Democratic nomination for President in the upcoming 2016 election.

In light of all this, I am concerned about our long-term energy future and the price we will pay for not adopting appropriate policies now that will expedite the clean-energy transition, which I consider inevitable. The costs I see are in continued dependence on other countries for parts of our energy supply, less flexibility in our foreign policy, environmental damage due to pollutant and carbon emissions, and long-term economic vulnerability as fossil fuel energy costs rise and other countries take the lead in providing clean-energy technologies to an expanding and more environmentally-sensitive global population. The U.S. has a choice to make, to be a major player in the coming clean-energy future, or continue to resist the speedy replacement of our current fossil-fuel-dominated energy infrastructure and play a diminishing role in the decades ahead. This is Kevin Phillips’ point, and one I agree with strongly: if the U.S. is not sensitive enough to the role of energy resources in a nation’s global standing, its role can change over time . We should learn from history, not just repeat it.

Status Report: the Blog as of 24 November 2014

This blog began in late May 2013 and is now a year and a half old. In that time I have prepared 74 blog posts expressing my opinions on a wide variety of energy, water-energy, and environmental topics, plus one fabulous cheesecake recipe. Having achieved my original goal of sharing my perspectives on the many energy and related issues I have thought about during a long Washington, DC career, I’ve decided to switch my focus a bit and do fewer blog posts than in the first 18 months (although I will still be blogging occasionally as opportunities and urges arise) and devote the bulk of my writing time to a book on energy policy and politics, as encouraged to do by my wife and several colleagues/friends.

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It will be a retrospective based on my 45 years of educating myself and thinking about energy issues. Much has changed in those 45 years and I have had a somewhat unique position from which to observe and influence those changes through the various professional positions I have held.

I admit to a bit of hesitation about taking on the task of writing a book, having watched several colleagues wrestle with such a task, but if not now when? I’m no longer a spring chicken and egocentric enough to believe that my perspectives may be of value to others, especially others who are younger. I anticipate a book of about 10 chapters and 200 pages, with a target date sometime in 2015.

In reflecting on the blog I’ve also concluded that the many blog posts to date, with more to come, could constitute the core of an energy course for students at various academic levels. The posts are designed to be non-technical for an interested lay audience and of moderate (OpEd) length for easy reading. As core elements of a wide-ranging course on energy and related issues the posts can serve as introductions to these various topics which can then be enhanced with additional readings selected by the instructor. Please share this suggestion as appropriate.

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Wish me luck!

What Might the 2014 Elections Mean for U.S. Energy and Environmental Policy?

The simple answer is that at this point we don’t know. Lots of different paths are possible, depending on how Republicans interpret their enhanced power in the U.S. Congress, how the President approaches his final two years in office, and how Congressional Democrats react to their minority party role. Nevertheless, I will offer my current thoughts and speculations, subject of course to significant change as we proceed in Congress’ 2014 lame duck session and the start of a new Congress in January with Republicans in charge of both Houses for the first time in eight years.

One major consideration that dominates my thinking is that Republicans, facing inevitable demographic realities in future elections (older white people as a declining percentage of the voting population, more non-white voters/mostly Latino and Asian, and a growing number of young voters generally more progressive than their parents and grandparents), must demonstrate that they can govern effectively if they are to win national elections in the future. Remembering the Gingrich era in the 1990’s, when Republicans took over the Congress, it proved much easier to be in the minority and sling arrows than to govern effectively when finally in power. The modern House of Representatives, under John Boehner as Speaker, has proved to be one of the least effective in American history, but with control of both Houses in Republican hands after January, Boehner and McConnell (the presumed Majority Leaders in the new Congress) have the opportunity to do more than just oppose Obama Administration initiatives. What Boehner and McConnell want to do and are able to do will determine their places in history.

The issues as I see them are as follows: policy for fossil fuel supply – coal, oil, natural gas, fossil fuel exports, Keystone XL pipeline, global warming and climate change, support for clean energy, water issues. Each will be discussed briefly below.

– Fossil fuel supply: with Kentucky’s senior Senator setting the agenda for the Senate it is likely that anti-coal activists will be unsuccessful in accelerating the pace of closure of coal-fired power plants in the near future. These decisions, made on economic grounds by power plant operators, will be self-interested decisions based on the legislative environment they are facing. With Republicans in charge I anticipate every effort will be made to slow down or repeal the EPA’s proposed rules on carbon emissions. While there are Republicans who understand the need to replace coal combustion with natural gas and eventually with renewable energy, the political reality that they may be challenged in reelection primaries by climate change minimalizers or deniers tends to keep them in line with status-quo positions. Coal’s role in power generation in the U.S. is clearly diminishing, faster than most people probably anticipated just a few years ago, but low-cost coal exports to other countries are picking up. As the UK experienced several decades ago, closing coal mines and losing the associated jobs is difficult politics, as this year’s Senate election in Kentucky demonstrated. Keeping one’s job is priority #1 for most if not all people, and the political system needs to keep this firmly in mind. Balancing this against the needs of environmental protection is what we pay our politicians to do.

The issues with oil and natural gas largely relate to fracking and its associated environmental threats, and with their export to other countries. Both are critical issues that can no longer be avoided and require careful policy prescriptions that Republicans are now in a better place to affect. Fracking of oil and natural gas from extensive shale deposits has expanded rapidly in the U.S. in recent years, and the U.S. Is rapidly becoming the world’s #1 oil producer (when shale oil adds to our declining but still large traditional domestic oil production) and a major souce of natural gas supplies. As discussed in two previous posts on this blog web site, I see no way to stop fracking in the U.S. because of the large associated economic returns, and therefore we must regulate it carefully to avoid the real possibility of water supply contamination and minimize accidental releases of methane, a powerful global climate change gas. Republicans can have their cake and eat it too if they support this needed regulation, gaining brownie points for their environmentalism and still allow the fracking industry to proceed on their profitable path. Substituting fracking gas for coal in power generation is in most people’s interest, and while I would prefer to replace coal with wind, solar and other renewable generation sources, we are not in a position to do that yet. Nevertheless, the U.S. public largely understands the need for this inevitable transition and Republicans would be politically wise to take a long-range view on facilitating this transition. We shall see.

A related issue is what to do about U.S. producers who want to export oil and natural gas. Large and remunerative potential markets await in Europe and Asia but since the 1970’s it has been illegal for companies to export crude oil in all but a few circumstances. The goal of the 1970’s legislation was to conserve domestic oil reserves and discourage foreign imports, but in reality, the export ban did not help accomplish either objective.

The Natural Gas Act of 1938, as amended, requires that anyone who wants to import or export natural gas, including liquefied natural gas (LNG), from or to a foreign country must first obtain an authorization from the Department of Energy. This is less of a barrier than the ban on oil exports, but until recently the U.S. was anticipating importing LNG, not exporting it. The fracking revolution has changed all this, and LNG import terminals are now being constructed as export terminals.

An argument against such exports is less fossil fuel and potentially higher energy costs for U.S. consumers. Foreign policy as well as economic considerations come into this discussion as we try to loosen other country’s dependence on Russian and Middle East producers. I anticipate that export controls will be loosened on a bipartisan basis and the U.S. will emerge as a major energy exporter in the decades to come.

Approval of the Keystone XL Pipeline by the President will be a key issue in the upcoming lame duck session of Congress and may carry over to the new Congress in January. My own view, expressed in an earlier blog post, is that stopping construction of the pipeline will not slow Canadian development of its tar sands oil resources and that I’d rather have the oil coming to the U.S. rather than going elsewhere. I also believe that transport of oil by pipeline is safer than transport by rail car, the obvious and unstoppable alternative. With regard to this issue, which many environmentalists have identified as a litmus test for President Obama’s environmental bona fides, I see the pipeline, which has strong Republican support as well as some Democratic support, as a done deal, perhaps as part of a tradeoff with other Democratic priorities such as immigration reform.

The issue of global warming and climate change is a difficult partisan issue but shouldn’t be. The science of understanding global warming is advancing steadily, its risks are clear to most people, and the largely negative impacts of climate change are increasingly being documented. The problem in the U.S. Is the political clout of industries dependent on sales of fossil fuels. In addition, Republican control of the Senate means that chairmanship of the Environment and Public Works Committee will fall to Sen. James Inhofe (R-OK), a climate change denier. This is clearly bad news for environmentalists and others who are concerned about climate change, but also for Republicans and Democrats who will eventually have to deal with this global crisis. Inhofe can slow things down and probably will, at least for the next two years before another Senate election is scheduled. It will be up to members and leaders of both parties to limit the damage that Inhofe can do.

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Support for clean energy (efficiency, renewables) should also not be a partisan issue, but unfortunately is. Vested interests in the traditional energy industries still have too much power with a Congress highly dependent on campaign funds. My views on the need to accelerate the transition to a clean energy economy are clearly stated in quite a few of my blog posts, reflecting my view that such a transition is inevitable and clearly in the national interest. Unfortunately, I expect the next few years, under Republican control of Congress, to be a repeat of the years under President George W. Bush (‘Bush 43’) when lip service was paid to clean energy but budget support didn’t follow. As I was taught on my first days in Washington, DC in 1974, budget is policy. I hope President Obama will take a strong stand on these issues, despite Republican electoral gains, since he no longer has to protect vulnerable Democratic candidates.

I bring water into this discussion because water and energy issues are ‘inextricably linked’. Energy production requires water and provision of clean water supplies requires energy. Republicans as well as Democrats must recognize the need to consider these two issues together, and I think they will. This issue needs visibility and increased understanding on the part of politicians and the public, and is a natural for bipartisan cooperation. I hope I am right.

Obviously, I have only touched lightly on the many energy and environmental issues facing the U.S., and encourage others to join me in this discussion. These next few years should be interesting indeed!