Our Coming Energy Famine Mario Loyola
https://www.nationalreview.com/magazine/2024/08/our-coming-energy-famine/
Most Americans are unaware of a grave danger looming on the horizon: a historic — and entirely self-inflicted — energy-scarcity crisis. The “transition from fossil fuels” presupposes that “clean energy” substitutes will be ready when needed. But while the war on fossil fuels is making real gains, at least in the electricity sector, the effort to deploy renewable substitutes is failing catastrophically. Add soaring demand, and America is facing the worst energy shortfall in its history.
The nation’s grid regulators are already sounding the alarm. “I am extremely concerned about the pace of retirements we are seeing of generators which are needed for reliability on our system,” Willie Phillips, a Biden appointee who chairs the Federal Energy Regulatory Commission (FERC), testified last year. According to fellow FERC commissioner Mark Christie, a Trump appointee, “The red lights are flashing.”
States in the Midwest are likely to be among the hardest hit. In a February report, Midcontinent Independent System Operator (MISO), a high-voltage transmission system that provides power to 15 states in the central U.S., warned of “urgent and complex challenges to electric system reliability,” citing a “hyper-complex risk environment.” NERC, which oversees electricity supply across North America, expects MISO to face a staggering capacity shortfall of 4.7 gigawatts (GW) — equivalent to above five average-size nuclear-power plants — by 2028.
Realistically, the only way that America could make up the shortfall in electrical capacity would be through a massive increase in the number of coal and natural-gas power plants. Alas, those are primary targets of the Environmental Protection Agency’s new power-plant rule, published in May.
The rule is supposed to force large fossil-fuel power plants — chiefly, existing coal plants and new natural-gas plants — to completely eliminate their emissions of carbon dioxide by adopting carbon capture and storage (CCS). This technology is not yet available on a mass scale and entails sophisticated reengineering of plants.
The relevant provision of the Clean Air Act requires that any such emissions standards be “achievable” on the basis of technology that has been “adequately demonstrated.” But in fact, no large fossil-fuel plant in the world has used carbon capture to achieve anywhere near the 90 percent reductions in carbon emissions by 2032 that the rule mandates.
The hurdles to compliance don’t end there. A prominent Princeton study estimates that to achieve “net zero” carbon emissions in the power sector with carbon capture would require 68,000 miles of carbon-transport pipelines. Pipelines are outside the EPA’s jurisdiction and expertise. And using its leverage over power plants to force the rest of society to reorganize itself raises the same “major question” that led the Supreme Court to strike down Obama’s Clean Power Plan in West Virginia v. EPA. The EPA is also supposed to consider costs, but the agency is discounting them by the value of federal subsidies, as if costs disappear when you shift them from ratepayers to taxpayers.
The power-plant rule faces an uphill battle in federal court, but its effects are already visible. Most coal plants — from which Americans get 16 percent of their electricity — are expected to shut down by 2032. Even worse for the long run, the rule has already frozen investment in the large combined-cycle natural-gas plants that provide nearly 40 percent of America’s electricity. Large natural-gas projects with permits that were pending when the rule was originally proposed in May 2023 have been unable to obtain financing.
Making matters worse, federal subsidies for wind and solar are poisoning the economics for “baseload” generators. Those are the large coal, natural-gas, and nuclear plants on which America depends for sufficient and reliable electricity. Such plants are finding it increasingly difficult to recoup operating costs; at various times of the day, many utilities can get electricity free from solar and wind, which forces baseload generators to go offline. So even if the power-plant rule is overturned (or withdrawn by a future President Trump), the renewable subsidies will discourage construction of new coal, natural-gas, and nuclear plants.
Meanwhile, demand for electricity is forecast to soar in the decade ahead. The AI revolution is multiplying the electricity needs of cloud providers just as dozens of new Biden regulations are forcing Americans to switch to electric vehicles and appliances. By 2032, electricity demand will grow by at least 15 percent. According to regulators, Texas alone will need an additional 152 GW of electricity by 2030, adding more than 10 percent to the nation’s existing electricity demand.
Add skyrocketing demand to the expected retirements of coal plants and America is facing a shortfall of 400 GW, or at least 30 percent of electrical-grid capacity, by 2032. Building 400 average-size nuclear plants — four times as many as the U.S. has today — would barely make up the shortfall. And America has hardly been able to build any new nuclear plants since the 1970s because of onerous regulations.
For generations, Americans have enjoyed the fruits of energy abundance. America generates and distributes more electricity to more people, more cheaply, than any other country on earth. Its private sector, a seemingly endless font of world-transforming inventions, continues to innovate spectacularly. The nation has the largest proven reserves of oil, natural gas, and coal in the world. Electricity could be as cheap as telephone service, essentially free. And yet America is facing a severe energy-scarcity crisis, entirely because of government policy.
Biden-administration officials say they’re counting on renewables to fill in the gap, but one has to wonder whether they really believe it. In 2023, a record year for new renewable capacity, America added about 20 GW of solar and just over 5 GW of wind. But because such sources are intermittent, the “accredited” capacity of the new additions is much less. Barely 4 GW of battery capacity — indispensable to replacing large coal and natural-gas plants — was added, a drop in the bucket compared with the looming shortfall.
Renewable-energy projects face the same regulatory hurdles that environmentalists have placed in the way of all infrastructure projects. Every solar project on federal land requires its own permit, usually from the Bureau of Land Management. That entails an extensive environmental-impact study — and a very expensive permit application. Project developers have to be prepared to lose $25 million on a single permit application, with no tangible assets to recoup.
Renewable-energy developers are coming in droves, but for only one reason: federal subsidies in the Inflation Reduction Act. Federal tax credits make renewable projects lucrative for developers. But the federal system for authorization and environmental review of them entails so many costs, delays, and uncertainties that many new proposals simply can’t survive years of bureaucracy.
Even if Biden officials were being honest about the transition to renewables, it would be pie-in-the-sky. Alas, behind the smoke and mirrors of “climate action,” they are selling out to left-wing environmentalists, who hate fossil fuels much more than they love renewable energy.
The Biden administration has done nothing to support significant permitting-reform proposals and has rolled back significant Trump-era reforms that disproportionately benefited renewable energy. (I was involved in drafting the Trump reforms.) The Biden administration quickly gives in to every local constituency with resources enough to hire a lobbyist.
A new Bureau of Land Management rule, billed as BLM’s “Solar Energy Plan for Western States,” only puts obstacles in the path of solar-project developers. The plan immediately takes 86 percent of BLM land off the table for solar energy, allowing development only within ten miles of an existing or planned transmission line. And inside that significantly reduced solar-development zone, the BLM is imposing ridiculous constraints on developers: for example, a blanket prohibition on “grading,” which is indispensable for construction, and a prohibition on development within 200 feet of ephemeral streams, which flow only during and after precipitation. In the desert West, any crevice could be an ephemeral stream.
According to the FERC, 95 percent of active capacity in the current “interconnection queue,” the line of existing and proposed power plants offering electricity to utilities, is solar. Supercharged by federal subsidies, the avalanche of proposed solar power exceeds the capacity of the nation’s entire existing grid. That number, too, is misleading: The overwhelming majority of these proposed projects will never be built. But they have already scared off virtually all baseload generators. Incredibly, for the coal, natural-gas, and nuclear plants that we actually need, the interconnection queue is nearly zero.
That brings us to transmission lines, which face exponentially more-difficult permitting hurdles. Prominent studies suggest that at least 600,000 miles of new transmission lines would be required to achieve “net zero” electricity. But transmission lines trigger opposition every step of the way, and even a short one in the middle of nowhere can take 15 years. Developers of renewables have enlisted lobbyists to help relieve the transmission bottleneck, but their efforts have produced only a FERC order that will impose on red states the cost of blue-state transmission development.
Elites can no longer feign ignorance of the problem; it’s now obvious. America faces energy scarcity, and the poor will be particularly hard-hit. Yet where is the concern on the part of these supposed humanitarians, who warn every day of the suffering that climate change will bring? They are well on their way to causing, in coming years, many of the very harms they predict will come decades from now. And yet they seem not the least bit troubled.
Perhaps they expect us to eat cake.
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