Debate continues across the country on our nation’s energy future. What is our best energy policy going forward?
Few doubt that energy has improved lives and enabled human progress. Yet one of the biggest challenges facing the world is the polarized debate over the future of energy. Facts and economics are too often replaced with assertions and emotions. Discussion about fossil fuels and alternative energy sources often degenerate into a battle to delegitimize the other side. This is a recipe for inaction. And it keeps billions of people trapped in energy poverty.
Several factors contribute to a higher standard of living, but one of the most important is access to reliable and inexpensive energy. Affordable energy is essential for almost every aspect of our modern lives. Affordable energy is needed to run the hospitals and laboratories that improve our health. Affordable energy is required to deliver electricity to our homes and put fuel in our vehicles. And it supports the millions of jobs associated with all of these things.
Concerns About Carbon - In general, the most affordable forms of energy come from fossil fuels, such as oil, natural gas, and coal. Compared to these energy sources, alternative fuels such as solar and wind power are considerably more expensive and less reliable.
Burning fossil fuels to generate electricity or provide power necessarily releases carbon dioxide (CO2) into the atmosphere. Carbon dioxide is a gas we exhale every time we breathe. Erupting volcanoes, decaying trees, wildfires, and the animals on which we rely for food all emit CO2. This by-product, which is essential for plant life and an unavoidable aspect of human life, is at the center of today’s climate change controversies.
According to the U.S. Energy Information Administration (EIA, the U.S. emitted 23% fewer energy-related carbon emissions in 2015 than 2005. And the latest Short-Term Energy Outlook (STEO) released by EIA in January 2020 showed energy-related carbon emissions decreased 2.1% in 2019 and are projected to decrease 2% in 2020 and 1.5% in 2021. The EIA projects energy-related carbon emissions in 2050 will be 4% below their 2018 value. This downward trend is occurring even as U.S. oil and natural gas production grows dramatically. The U.S. oil and gas industry has proven that over the long-term, we can lead the world in energy production and environmental stewardship.
Those who believe that increased CO2 emissions inevitably lead to global warming believe this change is directly attributable to the widespread use of fossil fuels. Because they believe further warming will have catastrophic effects, they have waged a war on carbon for many years. They advocate restricting carbon-based fuels in favor of subsidized alternative energy and encourage policymakers to make fossil fuels more expensive in hopes of discouraging their use.
Beware of Crocodile Tears - All too often state and federal proposals to tax carbon directly or launch new carbon tax schemes have much more to do with raising revenue than helping our environment. Taxing carbon only takes more resources from the private sector to support swelling state and federal government.
A recent study analyzed probable effects of a U.S. carbon tax that starts at $20 per ton and then rises 4% per year, which is in line with some recent proposals. The study suggested that such a tax would decrease household consumption, due to the increased cost of goods. The average household would have to pay 40% more for natural gas, 13% more for electricity, and more than 20 cents per gallon extra for gasoline. Costs would rise even more in subsequent years.
Price hikes like these can only mean lower standards of living and less opportunity. Families that spend a bigger portion of their household income on transportation, utilities and household goods are hurt, not helped, by carbon tax schemes that make traditional forms of energy more expensive.
Fossil Fuels are needed throughout the world to lift people up, which is different than a philosophy of embracing a zero-emissions world. Over 80% of the energy that the peoples of the world use to survive come from fossil fuels, because that is the cheapest, most plentiful, most reliable source ever developed. More than a billion people around the world face challenges for adequate food, clean water and protection from heat and cold due to a lack of access to energy. Anyone who cares about our environment and climate recognize that cheap, plentiful, reliable energy is essential.
A Better Way - As the oil and gas industry has shown, there is a better way. Just a few years ago, no one would have imagined the U.S. could increase production of oil and natural gas while cutting greenhouse gas emissions, which are now near 25-year lows. By focusing on more efficient use of energy, it is possible to lower emissions without imposing even more environmental restrictions. An American energy policy that values innovation over regulation can turn energy policy challenges into great opportunities for economic growth and energy security. This approach is not just good business, it’s good stewardship and a much better strategy for improving the quality of life for all.