The Campaigns Had An Actual Debate About Energy!

If you’re anything like me, you probably found the worst part of the Presidential debates to be the section on energy. Essentially, the candidates spent a couple minutes arguing over Solyndra and then a couple more seeing who could say the most nice things about West Virginia’s 5 electoral votes coal, then they reached a consensus that neither of them actually care when they could be arguing over who is the better job creator instead. 

So I was glad to see that an entire debate was held between the campaigns on energy at MIT. Here’s the transcript. The candidates themselves weren’t present, but their (high level) campaign surrogates were, which I suppose is the best we can hope for in what 99% of the public would find to be an excruciatingly boring debate put on by a bunch of MIT nerds. Romney was represented by his campaign’s domestic policy director, Oren Cass, and Obama by former White House energy and environment adviser Joe Aldy. I won’t write up a complete play by play commentary here, but I do want to point out a couple things. 

On the question of government incentives to spur energy innovation, Romney’s campaign would focus on basic research, rather than direct subsidies to specific companies (read: Solyndra). It kind of gets lost in an argument over wind subsidies, but both campaigns are really saying the same things here, that basic research is something the government should be doing. They both go on to praise ARPA-E (a DOE energy research funding program, modeled on a defense research funding program). The Obama campaign also sets a solid benchmark: a goal of 80% “clean energy” by 2035 in the power sector (ie electricity, not liquid transportation fuels). The problem is that coal and natural gas are included as clean energy. I’m less concerned about the carbon emissions aspect of this (and this holds true for my views on energy as a whole) than I am about the non-renewable nature of these fuels. My concern with a heavy reliance on coal and natural gas is that we will run out of both of these things, and find ourselves in the same boat down the road. We would be better served by renewables. 

The Romney campaign’s follow-up to that is, I think, very troubling (emphasis mine):

I think an interesting thing that Joe mentioned that begins to raise deeper issues about the president’s plan is that he frequently cites job creation as the goal. If job creation is the goal for energy policy, and Governor Romney believes it should be, then we should be focusing our energy policy in a direction that creates jobs. Now it is true that jobs are created assembling wind turbines, assembling solar panels, but in fact, the jobs that are destroyed and eliminated elsewhere in the economy every time we do that are significantly larger.

There is no evidence, frankly, that the sorts of investments the president is making in green energy are superior to using the far more economically effective energy technologies we already have available, and as with almost every area of technology we see, the best way to produce those innovations is not, again, through government choosing which technologies are best, but through actually encouraging innovation in the private sector.

Job creation is a wonderful, important thing. I support it! But it should not in any way be the goal for energy policy. As an added benefit, awesome, but not the goal. The goal of our energy policy absolutely must be to find a way to obtain energy sources that we can continue using for some time. Again, I don’t view this as much as an environmental issue (though it certainly is) than an issue of having the energy we need to do the things we want to do. Continued reliance on fossil fuels, coal and natural gas included, doesn’t fit the bill. We can and should continue our use of fossil fuels, but they will become progressively scarcer and more expensive, and will by necessity be phased out. We need renewable energy to fill their gap. Now is the time to find those sources, before we experience significant disruptions to our economy. Disruptions which, by the way, will have a massively larger impact on jobs than any individual policy we could argue over in this area.

In an exchange about shale gas, we get back into the argument we heard at the Presidential debate over drilling on federal vs. non-federal land. I really don’t undertand the distinction. It seems like a way to cherry pick the data to make a point, and the whole thing is being used as a proxy for an argument over the role of government. That’s all fine, but when it comes down to the actual issue of energy, 1 BTU derived from federal land = 1 BTU from private land. 

On the issue of “energy independence”, the Obama campaign’s answer acknowledges that the energy market is global. This is an important fact that I think is often misunderstood. Even if the US has the necessary energy production (from whatever sources) to meet 100% of its demand, it still participates in a global market. Some of that energy will be sold abroad and some domestically. We will likely never encounter a situation where we utilize only what we produce. 

The Romney campaign defines energy independence as “the economic activity associated with energy production is something that occurs here, so that the wealth that we are seeing experienced in the places that we import from now is instead occurring in our own communities.” But in the very next sentence he goes on to say we need to expand production in Mexico and Canada! 

In an exchange regarding explicit subsidies for various energy sources, The Obama campaign makes what I think is a very important point:

Now when we actually think about reforming these, I think it’s important that’s there some who say, let’s just have a level playing field. Let’s get rid of all the subsidies. Now when you’re doing that, you may say, hey, we don’t want to pick winners, but you are picking winners. First, those who have benefited by subsidies for an incredibly long time, the incumbents in the fossil fuels that have benefited from subsidies for, in the case of oil, nearly a century, they’re winners. They’ve become established, and they will actually benefit if you got rid of all of these.

Exactly. “Leveling the playing field” automatically hands advantage to oil, as the incumbent. Now you may say that this is just the free market at work, and that’s a perfectly reasonable opinion. But my problem is that markets are reactive, not pro-active. The free market case goes that when, for example, oil is no longer preferable, market forces will shift towards renewables (or whatever, non-oil). In the time it takes to make that shift, though, we will be hobbled by soaring energy prices. That will be crippling for the economy. Why, when we know that oil will become increasingly scarce, wait on the market signals? Best to develop the alternatives now, in my opinion, in order that they are ready for deployment when needed. 

The argument then goes on to what counts as a subsidy, and gets a little semantic, but neither side makes what is, to me, the obvious point. The largest government subsidy in the energy sector is the United States Military. The global flow of oil is secured in large part thanks to the fact that anyone who decides to block our flow of sweet, sweet crude will find themselves on the receiving end of a carrier battle group. This is never brought up in the discussion of energy subsidies, or cost/benefit analyses, but it is very significant. If we didn’t have oil to secure, our role in the middle east would be much reduced. 

On the topic of coal: Everyone loves it! West Virginia, 5 EV, etc. The debate quickly becomes a he said / she said on the job killing EPA and the cost / benefit of “clean coal” (ugh), but the Obama campaign makes the fundamental point when talking about the coal industry’s future:

In fact, when you actually look at the analysis, EPA did not say there’ll be no new coal plants because of this regulation. They actually said that because of natural gas prices, we don’t foresee any new coal plants coming online. So they actually estimated that there is not this burden on the coal industry because they are going to have challenges with new plants competing with natural gas.

Exactly right. Coal simply is not competitive with cheap natural gas. That’s just the reality of it. If you want coal to be a big part of our energy future, you have to shut down shale gas or heavily subsidize coal. Romney’s campaign can’t go all free market on us while simultaneously talking up coal’s bright future. Sorry, West Virginia. Yes, EPA regs will exacerbate coal’s problems, but they’re icing on the cake. Coal is going down in the face of cheap natural gas, with or without those job killing lazy socialist bureaucrats at the EPA. 

On the policy steps each campaign would take to reduce carbon emissions, Romney’s campaign makes the crucial point:

China’s increases in coal consumption are extraordinary. In fact, over President Obama’s term, for every 1 unit of coal that has been cut in the United States, China has increased its consumption by 10. And so in that context, for the United States to take action to drive up the price of carbon in this country to try to reduce emissions is not going to address what is a global problem. What it is going to do is hurt our economy very seriously, and it’s going to drive a lot of industrial activity from the United States to countries that are frankly much less efficient in their use of energy. So the positive benefit is weakened even further in that respect.

I don’t agree with the economic analysis here, but I’m glad Romney’s camp recognizes that carbon emissions are a global issue, and that the energy appetite of developing countries is voracious. Our reductions will pale in comparison to others’ increases. Now I don’t think that’s a reason not to attempt to curb our own emissions, but it’s an important aspect of the situation to recognize. Improving our efficiency and switching to renewable forms of energy will reduce our emissions, and have the benefit of reducing our demand for non-renewable energy! We can’t just ignore the problem because China. 

On the larger question of climate change, this came as news to me:

So what Governor Romney has said about climate change generally is that he believes its occurring, that he believes human activity contributes to it, but that he thinks there’s absolutely still a debate around the extent of — on both of those factors, and the nature of the threat that that poses. And so he certainly supports continued scientific inquiry in that respect.

Mitt Romney: Not a “climate denier”? Who knew? Don’t tell the Republicans. 

This post is already long and rambling so I’ll wrap it up. In my opinion, the largest problem we face on the issue of energy is that we rely on non-renewable sources which we will exhaust, at massive cost to our economy and society. We must find reliable, renewable alternatives. The issue of energy is largely misunderstood, and its discussion typically comes down to tree hugging hippy liberals vs. greedy pollution loving conservatives, but that’s a silly framing. Overall this was a good, substantive, and informative debate. I wish people knew it actually happened, and I wish the candidates themselves could engage in a debate like this, on this and every other issue. We would be a lot better off. 

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