Fossil fuels have long been subsidized by tax policies, such as the oil depletion allowance, and by infrastructure construction, such as the interstate highway system. In light of these long-standing subsidies, it’s always a little ironic when fossil fuel industry advocates complain about tax expenditures and other subsidies promoting the renewable energy business. In my view, in their time, all of these subsidies played a positive role in the nation’s economic development. The Tennessee Valley Authority and other New Deal programs subsidized rural electrification and brought the modern energy economy to a part of the country that the free market in energy might never have developed. No one seems to argue for the free market when they receive a subsidy, but if a competitor gets an incentive, suddenly the government is dominated by socialists determined to “pick winners.”
At this stage in our economic history, the global economy has begun to make the transition to renewable energy. While the Obama Administration took some modest steps to participate in that transition, the Trump Administration seems determined to reverse those initiatives. It began in May with the appointment of Daniel Simmons to lead the Department of Energy’s renewable energy office. According to the Washington Post’s Juliet Eilperin and Brady Dennis:
“President Trump has appointed Daniel Simmons, a conservative scholar who sharply questioned the value of promoting renewable energy sources and curbs on greenhouse gas emissions, to oversee the Energy Department’s Office of Energy Efficiency and Renewable Energy (EERE), according to an email distributed to department employees. The selection marks one of several recent Trump appointments to top energy and environmental posts, which appear to repudiate the Obama administration’s policies aimed at shifting the nation to low-carbon sources of electricity.”
In a similar move, Trump and his Department of Energy Secretary Rick Perry have closed a small office that worked to bring renewable energy to the developing world. Last week, Brad Plumer of the New York Times reported that:
“The 11 staff members of the Office of International Climate and Technology were told this month that their positions were being eliminated, according to current and former agency employees. The office was formed in 2010 to help the United States provide technical advice to other nations seeking to reduce greenhouse gas emissions. The small office also played a lead role preparing for the annual Clean Energy Ministerial, a forum in which the United States, China, India and other countries shared insights on how best to promote energy efficiency, electric vehicles and other solutions to climate change.”
It is important to understand that most of the real action in energy efficiency and renewable energy is happening in communities, cities, states, corporations and large nonprofit institutions such as universities and hospitals. Even under President Obama, the Tea Party-dominated congress ensured that federal efforts to promote renewable energy and energy efficiency were relatively modest. We should not overstate the importance of these ill-advised actions by Trump team, but like the slow and persistent drip of a leaky pipe under the kitchen sink, the long-term effect will be corrosive and far from helpful.
The anti-renewable energy push by the Trump Administration is driven by a staggering degree of ignorance, as indicated by an astonishing statement by Secretary of Energy Rick Perry at a Bloomberg New Energy Finance conference in New York this past April. As reported by Time Magazine reporter Justin Worland:
“During a question and answer period, Perry…suggested that increased reliance on renewable energy sources like wind and solar might make the grid unreliable given they only work when the sun is shining and the wind is blowing, creating national security concerns. The Trump administration might try to preempt state and local governments that use policy to encourage clean energy to address those concerns, Perry said. "There's a discussion, some of it very classified that will be occurring as we go further," Perry said. "The conversation needs to happen so the local governors and legislators, mayors and city council understand what's at stake here in making sure that our energy security is substantial."
No one pushing renewable energy is calling for an intermittent electrical grid. Distributed generation of energy is intended to allow renewable energy into the grid, but the use of renewables is being coupled with grid modernization and the development of smart, computer controlled grid technology. The entire dialogue around the smart grid and distributed generation of energy calls for the incremental construction of microgrids with renewable and fossil fuel sources of energy generation and substantial increases in energy storage. No one is advocating an unreliable grid. The goal is a more secure energy supply with a higher mix of renewables. By decentralizing the grid and diversifying the sources of energy, the goal is a more resilient grid, better able to compensate for interruptions due to extreme weather, human error or terror. The push for energy efficiency is simply an effort to continue to do more with less. Fossil fuels will be needed until renewable energy and battery storage is as cheap and reliable as fossil fuels. Renewable energy and smartgrids make our energy supply more, not less, secure.
The idea that the administration is even discussing pre-empting state greenhouse gas targets in the interest of national security is beyond absurd. Where does Perry get this stuff? Is this a serious conversation somewhere in the federal government? I can’t imagine an executive order rescinding state energy targets that could possibly be upheld by a court, and I can’t imagine any congress that would allow the federal government to preempt state greenhouse gas standards.
The reason to pursue renewable energy and to modernize the electrical grid is that energy is central to every aspect of the modern global economy. We can’t do without energy and we will need more energy in the future. Fossil fuels helped to develop this modern world, and they will not be abandoned overnight, but their long-term price and impact on the environment drive the search for lower cost, less destructive alternatives. The development of renewable energy and energy storage technologies will continue with or without Trump and Perry.
It would be much better if our national government played a leadership role here, but the ideological biases and ignorance of Trump’s energy appointees ensures that it will not. This is not simply about climate change. It is about air pollution, toxics, and also about the long-term price of fossil fuels when compared to renewable energy. There are plenty of fossil fuels beneath the surface of the earth at the moment, but as time goes on they will become less plentiful and more difficult and costly to extract. The price of the sun will always be zero and will never change, and the price of harnessing and storing its energy will go down as technology improves. Our use of energy will continue to grow, especially as automated labor replaces human labor. Any economy that is able to lower the proportion of its GDP devoted to energy will be better able to compete with other economies. Any company that can lower its energy costs while increasing its output will have an advantage over its competition.
The transition from fossil fuels to renewable energy will be long and difficult. Our investment in fossil fuels is massive and global and the industry has not been shy about converting its economic power to political power. Energy is as central to economic life as air and water is to human life. There are powerful economic, organizational and political forces at work resisting the transition to renewable energy. Yet, we live in an era of disruptive technologies and rapidly changing patterns of production and consumption. We carry computers in our pockets, drive cars that will someday drive us, and communicate and gather information at practically no cost. The powerful companies of the last generation are gone, and the powerful companies of the next generation are being invented in someone’s garage. The companies that develop cheaper and more reliable renewable energy and energy storage technologies will drive fossil fuel companies from the marketplace. It would be better for the planet if that happened sooner rather than later. Since Trump’s team won’t help, let’s convince them to end their attack on renewable energy and stay out of the way of the change that is on the way.