Energy Policy and Economic Outlook through the COVID-19 Lens
By David Holt, Consumer Energy Alliance
An enduring truth emerges from the immense disruptions triggered by the COVID-19 pandemic: Energy’s role is vital to our economy, our livelihoods and our lives. It serves as the foundation for everything we do, and – if our policy-makers make informed decisions – it will play an intrinsic role in our post-coronavirus future, as it has in every other modern economic recovery.
Certainly, the virus’ impacts have been enormous. One statistic – U.S. unemployment soared to a high of 40 million Americans in April 2020 – illuminates COVID-19’s devastating effects. Yet, what has been remarkable is the strength and resilience of our U.S. energy production and delivery systems – even while the industry has endured its own economic downturn and staggering job losses.
Think of it this way: despite the impacts on the energy sector, we have not had to worry about steady, affordable energy while we’ve all been homebound.
This underscores how remarkably durable and efficient our domestic energy systems are, especially when contrasted with the vulnerability of the health care, retail, services, and travel and tourism sectors during COVID-19. It also spotlights the necessity of maintaining reliable, resilient energy development to safeguard our families, small businesses and strong business environment.
Like all moments of crisis, there have been many ideas thrown out about how we should manage our world going forward, and energy ideas were no exception. Now that the shock has worn off and we’ve had time to sort through ideas good and bad, we have a perfect opportunity to discuss our energy reality.
We must seize this moment – when the public can feel the value of affordable, reliable and environmentally responsible energy – to engage and keep our energy aspirations high, and policies sound.
This means ensuring that our traditional energy strategies are maintained while embracing renewable energy sources. It also means working harder to drop the unnecessary politics that surround too many conversations about critical energy systems.
This means ending the ceaseless – harping by anti-energy factions who attempt to block energy development, extraction, pipelines, transmission, storage and use. These efforts are ill-informed, misguided, counter-productive and serve only to increase costs for families and businesses. And, importantly, they offer no real, tangible environmental improvement; in fact, in many instances, anti-energy efforts harm the environment by trading easy, real wins for promises. America – now more than ever – needs an all-of-the-above energy strategy that includes a reliable and resilient future.
Energy’s Essential Role in Critical U.S. Supply Chain Industries
Energy’s essential role in the critical manufacturing of items including cleaning products, medicine and life-saving medical equipment, clothing, or just about any good and product we can think of – is now more obvious than it ever has been. COVID-19 has alerted many of us that we too often rely on essential products that are manufactured in China or elsewhere. If we can all agree that our post-COVID vision is a stronger nation, with more jobs, revitalized economies, independent supply chains and robust national security, then we must ensure we have as much energy as possible – from every resource.
Congress has moved to help businesses and consumers alike with trillions of dollars in assistance, and more is expected. Still, on the energy front, too many policy-makers and regulators are hurting economic recovery and consumers’ wallets by scuttling vital energy projects such as pipelines and disregarding critical power sources including new technologies enabling ultra-low emission coal. Any policies that restrict the growth of environmentally responsible U.S. energy – in any form – must be rejected.
U.S. Mining Critical to Growth
The nation also needs to have a frank discussion about critical minerals and mining. Not just mining, but American mining. COVID-19 demonstrated how important it is to ensure we are not relying on unfriendly nations for important items – especially if policy-makers keep increasing our national renewable energy portfolio. Without critical minerals and reliable low-emissions power generation, the resources needed to support the wind and solar power that some envision will electrify more of our daily energy needs will NOT happen.
Consider what New York State policy-makers have done during the lockdown. They proceeded with activist-driven plans to de-select coal across the state, and close a nuclear power plant that provides a quarter of New York City’s power, without sufficient backup plans ready. They denied a pipeline, even though it would have helped lower emissions and end service disruptions on high-demand days.
Similar ill-advised decisions by policy-makers, regulators and federal judges are fueling investment uncertainty and project cancellations elsewhere.
While anti-energy critics may congratulate themselves on the success of their strategy of raising costs by delay and litigation, those hurt by their efforts include seniors, families struggling with energy bills, unionized construction workers and rural communities, including farmers.
The environment’s health is front and center in all of these debates – as it should be – but one thing activists are loath to admit is that America’s environmental improvement is leading the world, and many of these projects would have improved overall environmental stewardship.
Most Americans don’t realize that the U.S. will be two-thirds of the way to reaching its Paris Climate Accord emissions reductions targets by 2025. The U.S. has pared its annual carbon dioxide-equivalent output by almost as much as the entire European Union since 2005, according to the Environmental and Energy Study Institute.
Plus, the U.S. in 2017 trimmed almost twice as much carbon dioxide from the atmosphere as any other nation, delivering the single-largest absolute reduction of it. This occurred while the U.S. energy industry was growing to become the top oil and natural gas producer, and the No. 2 wind and solar power producer. Anti-energy activists either ignore this or answer that “more is needed”, which makes creating sound, fact-driven energy policy much harder.
Which brings us back to mining’s fundamental importance.
Access to reliable, cost-effective energy sources will require even more raw materials and low-cost electricity than before. For instance, the construction and operation of wind and solar power depends on everything from traditional fuels like coal, to aluminum to critical minerals like cobalt, vanadium and helium. The factories involved all the way from refining the raw materials to assembling the final products are nearly all powered by natural gas and coal.
New technologies and innovations are introducing us to new uses for familiar natural resources like coal and to less familiar ones, too.
We have coal in abundance, and while it is being used less for baseload power generation, it has a bright future with ongoing research identifying potential innovations in everything from advanced building materials to chemicals and medical sciences.
Vanadium, primarily used to harden steel while reducing its weight, is undergoing such a transformation. Henry Ford touted the Model T’s vanadium steel construction more than 100 years ago and today, it is essential for alloys used in high-speed airplanes, jet engines, vehicles, armor and spacecraft. It is now emerging as the key to making advanced technologies like utility-scale wind and solar, and electric vehicle batteries.
But the U.S. now must import all of its vanadium even though we have untapped deposits here. Fortunately, that’s changing after an executive order designated 35 minerals as critical to national security. One result has been the Gibellini Vanadium Project in Nevada, which could eventually produce about half of U.S. demand, according to the Department of Interior.
These are the kinds of smart, environmentally sound investments we need to support, while encouraging others to avoid knee-jerk responses and arguments against mining, and instead contemplate compromises and new mineral uses that move us to the future faster – under the world’s strictest environmental regulations and with American materials and labor.
We can either mine here, or let other nations do it in a less environmentally responsible way. We should not let the latter happen, but it already is. For example, China controls 90 percent of the world’s rare-earth mining right now, and is expected to control 95 percent of it by 2025.
Cobalt is a great example of why we need to control our own mineral supplies. It has scores of applications from health care to increasing digital storage, and is a vital component in lithium ion batteries that power smartphones. Most cobalt is produced now from disingenuously named “artisanal” mines in Congo – a politer way of saying mined by hand by exploited workers, including as many as 35,000 children, with zero environmental regulation.
There are better ways to find cobalt, including new technology that safely harvests it off the ocean floor – something we should embrace for our national security and to put an end to environmental destruction and abhorrent human rights abuses.
How we build an inclusive energy future while supporting innovations and actions that strengthen our supply chains, resource independence and environment should be part of the conversation in the lead-up to our Nov. 3 election.
No matter who wins or whom we choose to support, we can all agree that large-scale energy infrastructure investment – from renewables to traditional energy to mining – are essential to our recovery, to rebuilding our supply chains and keeping energy affordable, reliable and resilient.
The post-coronavirus era will be a new world, and Americans must embrace a broad, collaborative vision of what we need to do to achieve our important energy and environmental goals.
David Holt is president of Consumer Energy Alliance.