I’m a firm believer that we must support ALL energy sources because each of them will have a key role to play in the years ahead. Unfortunately, I’ve also come to notice that those in the renewable energy business are much more anti- coal, oil, and natural gas than the latter group is against the former, creating an “us” versus “them” mentality that ignores the fact that ALL energy sources have pros and cons.
So, a reality check is in order, especially since there’s a growing and dangerous push to 1) NOT produce more fossil fuels, 2) NOT build more related infrastructure, and/or 3) hurt the companies that produce our coal, oil, and gas.
As New England is finding out, where a lack of pipelines to access lower cost Pennsylvania shale just means more costly gas imports from Yemen (here), all the anti- coal, oil, and gas push does is help foreign suppliers because our demand isn’t going away. The movement against more coal, oil, and gas use faces a number of problems and unintended consequences that don’t go so easily ignored in the real world as hoped.
1. The goal to lower coal, oil, and gas use faces a fundamental economics problem: less fossil fuel usage lower their prices, thereby increasing the attractiveness of using coal, oil, and gas. For example, sunken gasoline prices are hurting electric vehicle sales.
2. Significantly less coal, oil, and gas use will create huge job losses, hurting families and communities, creating even greater resentment across the country. Federal and state funding to alleviate these losses are extra costs that will be measured in the billions of dollars.
To illustrate, never mentioned is the Native Americans losing their once steady and high-paying coal jobs because of continuous regulations, devastating tribes that often have over 60% unemployment. “There are 10 million direct and indirect oil industry jobs in America,” and highly skilled engineers can easily have annual salaries over $130,000.
Globally, some of the world’s poorest nations are very resource rich and rely on oil and gas sales for over 70% of GDP, crucial revenue streams that the anti-fossil fuel movement never considers. No solutions are ever given for these problems.
In fact, the U.S. solar business has actually been touting the “there’s most solar jobs than coal jobs” argument even though solar supplies less than 1% of U.S. electricity, and coal supplies over 30%. And the solar business has also touted that it has more jobs than oil and gas….ignoring the fact that oil and gas are 65% of our energy, and solar provides 0%!
In other words, the solar business is promoting the fact that it produces less energy with more workers. Indeed, economic majors we are not. Econ 101: jobs are a cost in the process of production; the services a job provides are the benefits. Using more workers to accomplish less is a sign of INEFFICIENCY, and obviously not something to boast about.
As for the undefined “green job,” my question remains unanswered: “does the coal miner that mines the coal that makes the steel that makes the windmill have a green job?” Certainly more so than the lawyers and administration assistants that inexplicably get counted in our “green job” tallies.
3. Less coal, oil, gas use will crush tax incomes for states and erode critical budgets (here), already stuck in challenging times since The Great Recession. In Wyoming, coal alone supplies $1.2 billion in taxes per year. In California, the state faces budget shortages because: “As motorists use less and less gas, gas tax revenues to pay for state highways, roads and bridges shrink.” Our largest oil and gas company, ExxonMobil, pays $85 million in corporate taxes…per day!
4. Although seeming like the ultimate “no-brainers,” even more policies for efficiency and conservation create unintended problems. Consider California’s drought and encouragement for people to use less water: “Water departments are increasing rates and adding fees because they’re losing money as their customers conserve.”
Fixed costs like repairing pipelines, customer service, and enforcing water restrictions continue to increase, and lost revenue from conservation must somehow be made up, frequently with higher rates. “Residents in the San Francisco Bay Area, for example, are seeing higher bills after the region’s largest water wholesaler increased the price of water 28 percent to make up for lagging sales.”
5. Indeed, hardly a panacea, more efficiency can actually mean MORE energy use because it lowers fuel costs. For example, ”buy a more fuel-efficient car, drive more.” Efficiency leads to economic growth for both the overall economy and the individual, causing total energy consumption to increase (“the rebound effect”). Conveniently ignored, we’ve known this “Jevons Paradox” of energy efficiency increasing demand since 1865 (here).
6. California illustrates how even tens of billions spent on more wind and solar ultimately means more natural gas because gas is the more reliable backup for their intermittency. Again, this cannot be overstated: the majority of the time wind and solar power are UNAVAILABLE. Natural gas now produces 61% of California’s electricity, up from 47% in 2003 when the state implemented it’s first Renewable Portfolio Standard.
This explains why wind and solar are in reality more “supplemental” than “alternative,” and why I’d argue that more R&D to lower the cost of renewables and create a way to store electricity at large-scale are far more important than building wind and solar farms (“Obama-Backed Solar Plant Could Be Shut Down For Not Producing Enough Energy“). Never mentioned is the fact that Europe’s wind power capitals of Germany and Denmark have home electricity rates of 40 and 42 cents per kWh respectively, compared to just 12.7 cents in the U.S.
7. Fossil fuel inputs are enormous, no matter which direction our energy system goes. Our entire complex is built on fossil fuels, so more wind and solar inevitably mean more coal, oil, and gas use. For example, diesel oil trucks are what move windmills and solar panels, and there’s about 150 tonnes of metallurgical coal via steel in an onshore windmill – and 250 tonnes of coal in an offshore one.
Still the best read here on the conveniently forgotten headwinds that non- coal, oil, and gas energy sources face in a world built on coal, oil, and gas, ultimately it’s evolving fossil fuel technologies that will reduce emissions most, not more wind and solar.
8. A global perspective is always required. With 6 in every 7 humans still living in undeveloped nations, the world has JUST STARTED to consume energy. The developing world has made it understandably very clear: poverty reduction is a first and overriding priority. There are 2,100 coal plants planned around the world.
The reality is that we will continue to see all energy sources, all of the time. Energy, after all, is the driving force of economic development and economic development is the driving force of longer, healthier lives. Got an energy project to install? The answer is “yes.”
9. Contrary to what you’re being told, renewables are not “new,” and in fact wind and solar were some of the first sources of energy (here, here). But, the world moved on, and in the 1800s coal, oil, and gas took the reins. The world moves forward, not backward, explaining why the next energy system is likely to be something completely new, like fusion, fission, hydrogen, or something else we’ve never seen before.
10. Scale and Irreplaceability. Too many Americans seem unable to grasp the sheer scale of our energy system, a monstrosity that devours 100,000 tons of coal, 35 million gallons of oil, and 3 billion cubic feet of natural gas…every hour. As sources of electricity, wind and solar don’t even compete in 60% of our energy system.
Mr. Musk’s shaken dreams (“fueled by $4.9 billion in government subsidies!” mind you) provide a prime example of just how dominant more reliable and more affordable fossil fuels are. The U.S. is now back selling over 17 million oil-based vehicles per year, andless than 150,000 of them run on electricity. And don’t forget: in any event, nearly 70% of our electricity comes from coal, oil, and natural gas.