By John Royall, President & CEO, Gulf Energy Information on 10/26/2020
(Note: This is written for our U.S. readers. If you are outside of the U.S. and have a keen interest in the U.S. presidential election, read on. Please know that for all our readers—in the U.S., Europe, the Middle East, Brazil, Asia—everywhere—Gulf Energy Information will promote and defend workers in the oil and gas industry.)
Last Thursday night former Vice President Joe Biden created a huge problem for himself. He made an astounding mistake for a career politician -- he accidentally told the truth.
Most will recall this critical moment in the presidential debate:
President Trump: Would you close down the oil industry?
Biden: I would transition from the oil industry, yes.
Trump: That’s a big statement.
Biden: It is a big statement. Because the oil industry pollutes, significantly… Because it has to be replaced by renewable energy over time.
Subsequently, after the debate, Biden realized his mistake and began to walk back his statement. However, there is too much evidence that what was said on stage is truly what Biden intends.
The Biden Plan
Among other items, Biden’s energy plan calls for the elimination of carbon from power generation by 2035. The genesis of the Biden Plan, which can be found on the Democratic Party Platform website, is the Biden-Sanders Manifesto of July 20, 2020, which was submitted to the Democrat National Committee by co-Chairs John Kerry and Alexandria Ocasio-Cortez. The plan calls for:
- Installation of 500 million solar panels, including eight million solar roofs and community solar energy systems;
- Installation of 60,000 wind turbines;
- 500,000 charging stations along American roads
- Converting the fleet of 500,000 school buses to zero-emission alternatives within five years;
- Transition of the 3 million vehicles in the federal, state, and local fleets to zero-emission vehicles.
- Dictate net-zero greenhouse gas emissions for all new buildings by 2030, on the pathway to creating a 100 percent clean building sector by converting four million buildings.
- Additional regulations for the oil and gas industry to achieve what is vaguely defined as “environmental justice.”
Joebiden.com, the official campaign website, under “The Biden Plan for a Clean Energy Future,” offers more general and aspirational policies, but in line with the Green New Deal. Through elimination of natural gas for power, government investment in electric vehicles to push out hydrocarbon fuels, and regulation of fossil fuels, the Biden plan will effectively eliminate natural gas and oil from American energy.
In order to make this all happen, the Biden Energy plan has called for $1.7 trillion over the first four years of a Biden administration to implement these plans.
3,177 Solyndras
In 2009, early in the President Obama/Vice President Biden’s first term, Solyndra received $535 million from the Department of Energy under a loan guarantee program. Solyndra was to use the money to build solar panels. The company lasted about two years, with the company declaring bankruptcy after one year and closing the business after two years.
Now, Biden would place billions, hundreds of billions, trillions of dollars in government contracts under the Biden Energy Plan. Since ostensibly this seems like good intentions, what could possibly go wrong?
Today, the U.S. enjoys an abundance of inexpensive and plentiful energy largely due to the oil and gas industry. All of us are beneficiaries, as transportation, home heating, power generation, and power for the industrial and business sector are competitive with the industrial world’s lowest costs. Consumers and businesses benefit.
A wholesale makeover of the US energy industry, directed from Washington, will lead to much higher energy costs for both consumers and industry. Every American will pay much more to heat and power their homes. Commuters will pay much more to drive to work. The competitive advantage enjoyed by American industry will disappear.
Just as troubling, is the movement of decision-making for energy from the market to Washington, where factors other than efficiency will play a role, as with Solyndra. Is the U.S. Energy Department a more efficient arbiter of capital allocation than the market?
Under current policy, Texas has become the number one wind energy producer in the US. Solar farms in the deserts of California are efficient producers of electricity as part of a larger energy network.
But a five-year plan administered from Washington is fraught with too many pitfalls, especially with elimination of oil and natural gas over a defined time. There will be much higher prices, and potentially even rationing, like in the 70s.
Look no further than California to see how this will work. There, the government shut down natural gas generating capacity in favor of renewables. This summer the state instituted rolling black outs wherein as many as 3 million Californians went without power. Eric Garcetti, mayor of the second largest city, Los Angeles, regularly comes on television to ask Angelenos to turn off appliances and turn up the thermostat to save electricity, so there’s enough to go around. It’s more like Lagos than an American city. (With apologies to Lagos. They at least try to produce enough electricity for their citizens.)
A better way forward is to bring on more renewables where they make economic sense, but to continue to rely on natural gas and oil as the backbone of US energy.
Quit vilifying our industry
After the debate, Biden tried to walk back his remarks. My guess is that his staff knew the magnitude of his error and got the press to line-up on the tarmac for a Biden statement. What he said was not nearly so revealing as the optics during his statement. Biden stepped out of a large SUV and spoke on the tarmac in front of his private jet. Obviously, fossil fuels are powering the Biden campaign, every bit as much as fossil fuels power America.
The U.S. needs the oil and gas industry. It’s a very big part of what makes us prosperous as a nation. It’s what allows Americans freedom, to travel, to live where they want to live, to enjoy an abundance of not only energy, but reasonably priced food and consumer products. The Biden Plan will lead to a kind of energy poverty that will impoverish especially middle class and poor Americans. Heating, cooling, transportation, manufactured goods, food—virtually everything will become much more expensive.
Rather than to be continually criticized by Biden and others who use our products for their own lives and business, it would be a much more productive approach to recognize the importance of the products we produce in the oil and gas industry, and to work toward a cleaner usage of fossil fuels as part of a broader energy mix in the future.
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