When President Ronald Reagan took office in 1981, one of the first things he did was order the solar collectors installed by President Jimmy Carter dismantled. It was no doubt a symbolic gesture, but he wanted to demonstrate the stark differences in perspective between his perception of the future, a U.S. without limits, and Carter’s view of a U.S. living within limits.
In no other area was this more easily demonstrated to the public than in the presidents’ two different approaches to addressing the “energy crisis.” Carter suggested turning down the thermostat, putting on a sweater, reducing energy consumption, and developing renewable energy. Reagan’s approach was to deregulate the energy industry and provide more incentives to explore and develop domestic fossil fuel-based energy sources, especially coal.
When Carter gave his infamous July 1979 speech – in reference to dealing with the energy crisis – he warned Americans that they could not live in a world without limits. Oil was in the $40 a barrel range (the equivalent of $140/bbl in today’s dollars); gas at the pump was touching $1 a gallon (the equivalent of $3.44 in today’s dollars); and the reality of long gas lines (and only being able to purchase gas on alternating days based on license plate number) was fresh in everyone’s minds.
The recessions of the mid to late 1970s – with high inflation, high interest rates, and high energy costs – reduced the worldwide demand for oil, and by 1986, with a glut of oil on the market, the price of a barrel of oil had dropped to less than $14 per barrel (the equivalent of $30/bbl in today’s dollars). For those in the Reagan administration, the energy crisis was over and they believed that their approach had been the correct one; they were vindicated based upon the premise that inexpensive energy was the prime objective of energy policy.
Today we have a similar situation occurring.
The Real Cost of Fracking: Déjà “View”
With the advent of fracking, the U.S. petroleum industry is setting new records for production. Anxious to capitalize on the high price of oil and with new extraction technology in hand, petroleum companies made a mad rush into North Dakota and other areas of the country with promising oil shale deposits.
The frenzied atmosphere and speed at which they are drilling gives the impression that, if they don’t extract it immediately, it might all go away. The predictable result has been the current glut of oil and gas on the market; from a high of over $140 per barrel in 2009, oil is now trading in the mid $70 range – and predicted by many to drop into the mid $60 range.
In the mad frenzy to extract, it is estimated that, in North Dakota alone, over 30 percent of the gas is flared and over $1 billion per year is going up in smoke. By contrast, Texas flares 0.8 percent of their natural gas. Though even the oil & gas industry will not say the days of oil shortages for the U.S. are over, they would like to start exporting it.
So it is with alarm and déjà “view” that news for the renewable energy industry, as well as the general health of the population of the United States, is not boding well.
With the Republican Party taking control of the Senate, it is a given that the Senator from Oklahoma, Jim Inhofe, will be heading the powerful Environment and Public Works Committee. He has been one of the leading voices of the climate change deniers, calling global warming a hoax and comparing the Environmental Protection Agency (EPA) to the Gestapo.
Lisa Murkowski, Senator from Alaska, will more than likely chair the Senate Energy and Natural Resources Committee. Though she expresses concern about global warming and has been quoted as saying that the government should address the causes of global warming, she also says she’s not sure what causes it. Maybe not a denier, but one of the voices supporting the position that “all the science is not yet in.”
The oil and gas industries drive the Alaska economy, with the exploitation of natural resources not far behind. Based upon historical positions, she will no doubt be more sympathetic towards these industries when balancing energy policy and environmental impact with exploration and extraction.
And one cannot overlook Senator Mitch McConnell of Kentucky, who next session will become the Senate Majority leader. Kentucky derives over 90 percent of its electricity from coal and is the third-largest producer of coal in the U.S. As the Senator from Kentucky, he has unabashedly defended the coal industry, and his voting record on renewable energy and the environment is one of the worst in the Senate – at least from an environmentalist’s standpoint.
Though his retort to questions regarding his stand on climate change is “I’m not a scientist,” as late as 1995, as a staunch defender of the tobacco industry, he questioned the science behind the 1993 EPA study on the dangers of second-hand smoke.
Though the importance of this change of guard in Washington needs to be noted as to its potential anti-environmental agenda, it is equally important to be aware of the more subtle changes taking place at the state levels.
The Organized Threat to Renewable Energy
The Wisconsin Public Service Commission recently approved an increase of 83 percent to the fixed charges for net metering customers of Wisconsin Public Service Corp. (WPS), upping charges from $10.40 per month to $19 per month. They had requested $25 per month. The average customer bill is $77, so this new fixed charge represents approximately 25 percent of a household’s electrical bill. Two other utilities in Wisconsin have requested increases of fixed charges of 82 percent and 75 percent for self-generators. Their supporting argument has been that as more people self-generate (solar), the burden of paying for and maintaining infrastructure is increasingly falling on fewer of their customers.
In the case of WPS, the two commissioners who voted for the increase were appointed by the current Republican Governor Scott Walker. Republican lawmakers in Wisconsin have introduced legislation to impede if not totally stop the development of wind energy in the State. In 2013, Senate Bill 167 was introduced which would have given any landowner within 1.5 miles of a wind farm the right to sue for any manner of damages, medical, pain and suffering, loss of property values, expense of relocating, etc., and to recover attorney fees, regardless of whether the project had gone through the prevailing permitting process and been approved by the required local governmental agencies. It did not pass, but it is highly likely that other anti-wind legislation will be introduced in the upcoming session, most probably by the same Senator who sponsored 167 and Senate Bill 71 (which also failed).
In Arizona, the Arizona Corporation Commission, is considering a measure to overturn a 2010 energy efficiency rule giving State electric and gas utilities until 2020 to reduce demand by 22 percent and 6 percent respectively. The new proposal would eliminate this requirement. This is essentially an attempt to roll back energy conservation policies. How any person or governmental agency could be opposed to energy conservation is more than disturbing.
In Ohio, Republican Governor John Kasich signed into law a bill freezing for two years Ohio’s renewable energy and energy conservation mandate, making it the first State to repeal such a mandate. The mandate stipulated that, by 2025, Ohio utilities must get 12.5 percent of their energy from renewable energy sources. Ohio is ranked 5th in the nation for consumption of energy and currently gets almost 70 percent of its energy from coal. Less than 2 percent comes from renewables, including conventional hydroelectric.
Renewables have faced continual, organized attacks from the right, financed by such entities as Americans for Prosperity, American Legislative Exchange Council (ALEC), and the Heartland Institute, many of which have been financed by the Koch brothers, to repeal State legislation supporting the usage and development of renewable energy. Currently there are movements across the U.S. to have utilities charge additional fees to people who self-generate, to repeal net metering regulations, and to eliminate renewable energy portfolio standards. These lobbying entities have been extremely active in the anti-wind movement and repeal of the production tax credits for renewables.
The Western States Petroleum Association, the oldest and one of the largest petroleum industry lobbying organization, recently circulated to its members a PowerPoint presentation that outlines what they term “Priority Issues.” It is a basic manifesto to attempt to rollback and fight state legislation designed to address and combat climate change issues, with California’s historic AB32, known as the “California Global Warming Solutions Act of 2006,” a prime target.
Americans for Prosperity (AFP) has initiated a 15-state print ad campaign opposing extension of the Production Tax Credit (PTC) for wind. AFP flatly states that the ads are targeted at getting the public to pressure their representatives to go on the record opposing any subsidies/tax credits for renewable energy.
In October of 2014, ALEC introduced its draft of the “Electricity Freedom Act,” proposing that legislation be introduced that eliminates any state mandates stipulating that a certain percentage of their energy come from renewables by a specific date.
In May 2014, the Energy and Policy Institute, a clean energy think tank, published a document that outlines, state-by-state, the various attacks on renewables.
We are once again facing the prospect of having to fight back the forces that categorically take the position that inexpensive energy trumps the environment, is good for the economy and jobs, and that mandating and investing in clean air regulation and technology must be tempered by a narrowly-defined financial impact analysis.
The fact that the Supreme Court has agreed to hear another lawsuit against the EPA (The National Mining Association v. Environmental Protection Agency) relating to their mandate to regulate emissions from power plants and pursue clean air objectives is indicative of the power of the heavy users of energy, utilities, coal, and oil and gas industries in the U.S. This is the third time in just over a year that the court has agreed to review the EPA’s authority and regulatory oversight over air pollution.
In April of 2014, the court upheld an EPA regulation that limits air pollution across state lines, and in June of 2014, the court largely upheld the government’s ability (viz. the EPA) to regulate greenhouse gas emissions from utility power plants.
This case will hinge on whether or not the EPA must take into consideration “cost” when promulgating regulations, and then face the difficulty of determining what is an acceptable cost. Will quality of life issues carry any weight as a cost consideration or will it solely hinge on monetary values? If the Supreme Court rules in favor of industry, enforcement of the Clean Air Act will be seriously diminished, and areas of the U.S. may once again begin looking like Beijing on a bad air day.