I have written a lot of columns
about the consequences of human-caused climate change, describing those both
current and projected. My wife tells me my columns are getting depressing.
So this column is about the
energy policy of our current Federal Government. It should not be surprising
that the Trump administration is basically attempting to implement whatever the
fossil fuel industry wishes.
First off is the Department of
Interior’s recent decision to open up the entire US east and west coast’s outer
continental shelves to oil and gas exploration because the administration wants
to make America “energy dominant”.
We already produce almost as
much oil as Saudi Arabia, due to fracking and sophisticated drilling
technology, which allows energy companies to extract oil and gas from shale
formations that have been ignored since the first oil well was drilled back in
1859.
Kinda makes us energy dominant
already and thus a big player in the world’s energy markets.
Last year, the USGS estimated
that one shale formation in West Texas’ Permian Basin contains 20 billion
barrels of oil and 16 trillion cubic feet of natural gas. Not only that, but
the 75,000 square mile Permian Basin already has the infrastructure in place to
extract, transport, and refine these hydrocarbons.
In contrast, the USGS estimates
that mostly likely the entire 1.56 MILLION square mile outer continental shelf
from Canada to Florida contains only 1.4 billion barrels of oil. In addition,
there is no infrastructure off the east coast. No pipelines, no platforms, no
nothing. In addition, wells might have
to be drilled in waters up to 12,000 feet deep.
The Macondo well, you know, the
one that blew out in the Gulf of Mexico in 2010, was in waters 5,000 feet deep.
Coupled with the recension of regulations to make such deep-water drilling
safer – What could possibly go wrong? But I digress.
Offshore oil exploration and
production is expensive and oil prices have to be very high to make it
worthwhile, like north of $100 per barrel. The price of oil has been anything
but for the last decade, because the US is energy dominant . . . already. It’s
currently $64 per barrel.
Along with laughably bad
economics is the laughably rapid reversal of the new policy that took Florida
off the table almost immediately to placate Governor (soon to be Republican
Senate candidate) Scott (former offshore drilling advocate) because “Florida is
unique and its coasts are heavily reliant on tourism as an economic driver”.
I think every governor up and
down the east and west coasts could make the same argument and most assuredly
they will when (not if) they sue the Interior Department. #WhatAboutUs?
Thus, I doubt we will see any
drilling platforms off our coasts for a very, very long time.
Then there is the Department of
Energy Federal Energy Regulatory Commission or FERC. The Secretary of Energy
asked FERC to institute a policy of supporting coal power plants under the
guise of energy resilience, because they can stockpile their sources in the
event of an emergency. This policy would slow the retirement of uneconomic coal
power plants, prop up the price of coal power, and jack up consumer electricity
prices by billions of dollars. So much for free markets.
This proposal was a sop to the
coal industry, nothing more.
To everyone’s surprise, FERC,
whose members are dominated by Trump appointees by the way, rejected the
proposal.
Did I mention that Republicans
made sure the Tax bill passed late last year preserves tax breaks for wind and
solar, the two most rapidly growing sources of electricity in the US? Iowa gets
a third of its electricity from wind and to no one’s surprise, Senator Chuck
Grassley (R – Iowa) made sure the provisions remained.
Of course, the oil and gas
industries have long benefited from all sorts of tax breaks.
Regardless of incentives, the
price of alternative energy continues to drop, making it competitive with
fossil fuels, even when wind and solar tax incentives end in 2022.
These are examples of Trump administration energy policy
proposals that are running into the headwinds of reality, both economic and
political. They will end up being, as the Bard put it “. . . full of sound and
fury, signifying nothing.”
Published in the Westborough News, January 19, 2018
