What is our energy future going to be in U.S.?
Debate continues across the country on our nation’s energy future. What is our best energy policy going forward?
Few doubt 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. This is a recipe for inaction. And it keeps billions of people trapped in energy poverty.
Concerns about carbon: The most affordable and reliable forms of energy come from fossil fuels. 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 Energy Information Administration (EIA), the U.S. emitted 23% fewer energy-related carbon emissions in 2015 than 2005. The EIA’s January 2020 Short-Term Energy Outlook 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.
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. 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.
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 result in the average household paying 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 and we should use our newfound energy abundance to lift people up, which is different than a philosophy of embracing a zero-emissions world.
A better way: By focusing on more efficient use of energy, it is possible to lower emissions without imposing carbon tax schemes or even more environmental restrictions. Energy policy that values innovation over tax schemes and regulation can turn energy policy challenges into great opportunities for economic growth. This approach is not just good business, it’s good stewardship and a much better strategy for improving the quality of life for all.
Edward Cross is the president of the Kansas Independent Oil & Gas Association.