It doesn’t take a savvy political insider to decipher the platforms of the GOP and Democrats when it comes to energy policy. Democrats believe that in the short term we are tied to combustible sources but are willing to increase subsidization to renewable sources to slow and eventually reverse that position. At the same time the Democratic policies include tougher regulations on the acquisition of combustible sources (through strict restrictions on oil drilling, strip mining for coal, and hydraulic fracturing land uses).
The GOP asserts that subsidization of renewable sources is an unfair market practice which artificially props the viability of sources such as solar and wind power. Additionally the GOP believes that regulations on acquisition have gone to far citing the moratorium on off shore drilling, clean water policies which work against hydraulic fracturing, and coal burning regulations which create undue production costs. At the core of this platform is the concept that when other energy sources become economically beneficial the market will dictate this transition, but at this time there is no need to restrict combustible sources. This policy extends to end uses of combustible energy including their stance against stricter fuel standards for vehicles as well as rail investment in local (competing with vehicle miles) and long haul (competing with airlines) systems.
The GOP is right.
In today’s market conditions, given the existing production capacity of renewable sources, energy created from solar and wind power can not compete against the relatively cheap cost of coal and oil. Oil and coal are extremely efficient energy sources that can be recovered at low costs which contradicts the long development and upfront capital costs needed for renewable production. In other words, if you find coal you can burn it and convert it into a lot of instantaneous energy in a highly scale-able manner, but in order to harvest wind and solar power you must put in place expensive systems with relatively low instantaneous returns.
Of course what graphics like those released by oil and coal producers don’t point out is the wind project constructed today is very much a continued energy source 20 years from today with marginal (less than 10% upkeep similar to that of coal/oil power plants). Therefore, to be fair, a dollar spent today on wind/solar will always be more affordable than oil/coal given a long enough study period.
Risk
When viewed at the individual level we have previously shown that returns for residents on renewable energy come to parody with combustibles between 25-35 years; what you build today in renewables will end of being better in the long run after 25-35 years compared to combustibles. More importantly, unlike renewable sources, all combustibles (including GOP darlings Coal and Natural Gas) have finite limits.
The cost to retrieve a resource is not as linear as the tracking price for that resource. While oil and coal has steadily risen in price the cost to retrieve that resource fluctuates far more wildly due to the logistical needs of the process. The middle of the 20th century included oil sources that were far more accessible than those we now face. Regardless of our discovery of additional shale fuel sources we will never again see the retrieval costs for these sources that we once had, and moving forward the trends continue to show that the reservoirs we have are becoming harder and harder to capture. When the tap runs dry on the final portions of easy to attain oil the price will irreversibly rise to the new normal.
The policies of the GOP refuse to equate a cost of risk for when this transition is complete. When that occurs, if we have not introduced viable alternatives, our economy will suddenly be halted for what could be an entire decade in order to build the infrastructure needed for the new, now marketable, sources. The loss to our economy will be measured in trillions while we wait for the costly upfront capital investment needed for renewables. Unlike coal and oil you can’t just burn more; you have to have in place the needed harvesting.
Health
There are many in the GOP who believe that there is no risk of us running out of combustible fuels. They cite reports that indicate centuries of energy available within North America alone (again discounting how expensive those reservoirs will be to fully capture). We’d like to point out there are several other reports that indicate that peak oil is not only real but has already occurred.
Let’s say that the endless resource studies are correct. There is still a significant drawback for the use of combustibles instead of renewables.
It may not shock you that China is the world’s largest consumer of coal energy (2nd by oil consumption). The cheap energy source has been the fire for industry that took the once agrarian nation to the world’s 2nd largest economy. With the massive economic gains that came with cheap and unregulated energy came the drawbacks of hazardous pollution. The World Health Organization has called Chinese Air Pollution a crisis which has caused the world’s highest incidence rates of premature deaths, respiratory failure, and pulmonary disease. All of these ailments have been tied by numerous independent studies to the increase of particulates, sulfur dioxide, and nitrogen dioxide.
Whether or not you believe the science is still pending on climate change (it’s not by the way) these studies on immediate impacts of particulate levels in air are set in stone… unless you also are one of those people who thinks that cigarette smoke isn’t bad for you too.
As our dependence on coal increases we will experience many of the same health impacts from this form of combustible. Many industrial regions of America already shows higher than average cases of pollution illness similar to those seen in China. This trend will continue if not expand given economic growth founded in combustible energy.
The GOP is right when they say that the market has said no to renewable energy. Unfortunately they are absolutely wrong if they believe the market is capable of avoiding future impacts if that dynamic changes. One has to only look at the impact of market dynamics in housing to understand that today’s condition has no forbearance on the future. However, unlike the housing market we can not correct the sudden shift by inducing low interest rates or pumping new money into the system, the logistics of capital improvements for energy production are long duration projects. We must put in the hard work of sowing the seeds for alternative fuels today if we want to have a emergency crop in the future.