Cheap Reliable Energy Sets the USA Apart: Gas, Coal & Nuclear Sideline Subsidised Wind & Solar

America truly is exceptional: while plenty of Western democracies are still piling into subsidised wind and solar, the USA is getting out.

Prior to the election of Donald J Trump, the US was on an economy wrecking trajectory, set by renewable energy rent seekers and the eco-zealots that champion their cause: numerous American states, not least Texas and California, as well as the prairies of the mid-west have been overrun with costly and chaotic subsidised wind and solar. Power prices in those states inevitably rocketed – wind and solar ‘powered’ Californians pay 40% more for power than the US average – threatening homegrown American industry and hundreds of thousands of blue-collar jobs.

Then came Donald Trump, and all that changed.

One of the loudest advocates for wind and solar in the US, Audrey Zibelman was run out of town and ended up in Australia – where she’s clearly determined to destroy our once affordable and reliable power supplies in the same way she would have done in New York State and beyond, had Hillary Clinton taken the Oval Office in 2016.

Average retail power prices across the US are around 1/3 of the power prices that prevail in Australia, and Trump quite obviously wants to keep it that way.

Ditching America’s commitment to the Paris climate treaty, was only one of a raft of measures taken by the President to ensure that the USA remains exceptional, not least as an energy superpower.

Naturally those that promote the ‘benefits’ of nature’s wonder fuels, the wind and sun, detest Donald Trump, not least because the USA tends to set the world’s agenda, irrespective of what the bureaucrats and boffins within the UN and attempting to run Europe might think. Picking up that theme is Rupert Darwall.

Rupert is the author of ‘Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex’. What appears below comes from The Australian and is an edited version of the article that appeared in The Weekly Standard.

Coal Finds a Bold Saviour
The Australian
Rupert Darwall
16 August 2018

Donald Trump’s exceptionalism halts the green tide

Thirteen years ago, a Republican president who had pulled the US out of an onerous climate treaty faced isolation at the annual gathering of Western leaders.

“Tony Blair is contemplating an unprecedented rift with the US over climate change at the G8 summit next week, which will lead to a final communique agreed by seven countries with president George Bush left out on a limb,” The Guardian reported of the meeting at Gleneagles, Scotland.

France and Germany preferred an unprecedented split communique to a weak one, the article said. George W. Bush, who had pulled the country out of the Kyoto Protocol in 2003, blinked and agreed to an official document that affirmed global warming was occurring and that “we know enough to act now”. The 2005 G8 put the US back on the path that led through the Copenhagen climate summit — when China and India thwarted US-led attempts at a global climate treaty — to the Paris Agreement 11 years later.

There was a different US president this June at the Charlevoix G7 (as it has been since Russia’s suspension in 2014) in Quebec. Had it not been for the row with Justin Trudeau, when the Canadian Prime Minister responded to ­Donald Trump’s steel and aluminium tariffs with retaliatory tariffs of his own, the big story would have been the climate split.

Where 15 years ago the mere possibility of isolation pushed Bush to compromise, Trump embraced the isolation and inserted an America-only paragraph into the summit communique outlining a position fundamentally contradicting the rest of the group’s.

“The United States believes sustainable economic growth and development depends on universal access to affordable and reliable energy resources,” it reads, going on to offer a manifesto for global energy realism.

That single paragraph is more definitive than the President’s announcement last August that the US would be withdrawing from the Paris treaty. After all, Bush nixed the Kyoto Protocol that Bill Clinton signed. And Trump, when announcing the Paris withdrawal, left the door open to US participation in a renegotiated climate deal. At Charlevoix, he closed it. Unlike in 2005, it’s very hard now to see any way back.

This is about far more than process. Trump is breaking the spell of inevitability of the transition to renewable energy. The impression of irresistible momentum has been one of the most potent tools in enforcing compliance with the climate catechism.

Like socialism, the clean-­energy transition will fail because it doesn’t work. But it requires strong leadership to avoid the ruin that will disprove the false promise of cost-free decarbonisation.

That reality is already hurting those countries that are further down the renewable-energy path of ruin than the US — and, when offered the chance, voters are taking it out on politicians. In March, a fanatically pro-wind and solar energy Labor government in South Australia decided to make the state elections a referendum on renewable energy. With some of the world’s most expensive electricity and a serious blackout in 2016, South Australian voters kicked out Labor and backed new Liberal Premier Steven Marshall’s vow to repeal the state’s renewable energy target.

Days before Trudeau took the centre of the global stage as host of the G7 summit, his Liberal Party was trounced in elections in Ontario. The province’s party had won four consecutive terms in office and had pressed every pro-renewable, anti-hydrocarbon policy imaginable. In the June 7 elections, it took seven seats in the 124-seat legislature. “I made a promise to the people that we would take immediate action to scrap the cap-and-trade carbon tax and bring their gas prices down,” new Premier Doug Ford announced.

Nowhere has confrontation with the physical and economic realities of renewable energy been more painful than in Germany, the birthplace of renewable-energy ideology. As party leaders negotiated a new coalition agreement after elections in September last year, they acknowledged for the first time that Germany was going to miss the sacrosanct 2020 target to cut greenhouse gas emissions by 40 per cent from 1990 levels. This had been set in 2007, and the first 20 per cent had been easy. Thanks to German reunification, the former East Germany had seen its industries collapse, and there were plenty of inefficient power stations to close. It had always been clear, Chancellor Angela Merkel declared three weeks after the September federal elections, that it was not going to be easy to cut the other 20 per cent “at a time of relatively strong economic growth”. Note: Stronger growth equals higher emissions.

Launching the German renewables transition in 2004, energy minister Jurgen Trittin promised it would put no more than the cost of an ice cream on monthly electricity bills. Nine years later, his successor, Peter Altmaier, admitted the costs could amount to $US1.34 trillion by the end of the 2030s. At a meeting in June of EU energy ministers, Germany ran up the white flag. Altmaier shocked fellow EU energy ministers by rejecting higher renewable energy targets. “We’re not going to manage that,” he told them. “Nowhere in Europe is going to manage that. Even if we did manage to get enough electric cars, we wouldn’t have enough renewable energy to keep them on the road.”

No country has a greater abundance of hydrocarbon energy than the US. The corollary is that no country was as big a loser from participating in the Paris Agreement and its intention to progressively decarbonise the world’s hydrocarbon superpower. On July 10, the Energy Information Administration forecast that next year the US would produce 12 million barrels of oil a day and overtake Saudi Arabia to be the world’s No 1 producer. When it comes to the politics of energy, the interests of the US and European green ideology are irreconcilable.

Trump understands this. “Our country is blessed with extraordinary energy abundance, which we didn’t know of even five years ago and certainly 10 years ago,” the President said last year. Those remarks were not only a paean to America’s energy resources, they were a full-dress rejection of the policies of his predecessor and of the Democrats’ goal of Europeanising US energy policy.

“We have nearly 100 years’ worth of natural gas and more than 250 years’ worth of clean, beautiful coal,” he said. “We are a top producer of petroleum and the No 1 producer of natural gas. We have so much more than we ever thought possible. We are really in the driving seat. And you know what? We don’t want to let other countries take away our sovereignty and tell us what to do and how to do it. That’s not going to happen. With these incredible resources, my administration will seek not only American energy independence that we’ve been looking for so long, but American energy dominance.

“And we’re going to be an exporter — exporter. We will be dominant. We will export American energy all over the world … These energy exports will create countless jobs for our people, and provide true energy security to our friends, partners and allies all across the globe.”

For the first time since 1992, when George HW Bush went to the Rio Earth Summit, a US president was outlining a global energy strategy diametrically opposed to the tenets underlying the UN climate process. Trump was establishing a rival pole based on energy realism and energy abundance.

The Rio summit was the brainchild of Canadian Maurice Strong, and he understood that what most motivates political leaders, bur­eaucrats, and corporate chiefs is the fear of being left out. “The process is the policy,” Strong said, and the annual climate conferences that have been held since the UN Framework Convention on Climate Change was adopted in Rio created a sense of irresistible momentum. It’s that spell Trump is breaking. Countries around the world are being damaged by the anti-hydrocarbon policies encouraged by the UN, but leaving the Paris Agreement was a step only the US was strong enough to take. Now it is up to the Trump administration to help other countries act in their economic interests.

Energy Secretary Rick Perry has talked of US willingness to lead a global alliance of countries wanting to make fossil fuels cleaner rather than abandoning them. Of the G7, Japan has been most leery of decarbonisation, and after the 2011 Fukushima accident it decided to expand its coal-fired generating capacity by half, building 45 new coal power stations.

Poland is another coal-based economy that has no intention of phasing out coal. Of all energy-­realist nations, Poland is the one that sees eye to eye with the Trump administration. During the Brezhnev years, it — alone among the Eastern Bloc nations — refused to sign up to sulphur emissions cuts designed to isolate Britain and the US at the height of the acid rain scare. As host of the next round of UN climate talks, at Katowice in December, Poland is a key US energy ally. Australia, the world’s largest coal exporter, is another obvious US partner.

Where the US can make the biggest difference, though, is with the developing nations that depend on overseas finance to build out their electrical grids and need the cheap, reliable energy only coal can supply. Last September, Southeast Asian energy ministers called for greater promotion of clean coal. In June, India struck a strategic energy partnership with the US, described by Perry as an “amazing opportunity for US energy” to sell clean coal, nuclear technology, oil, and gas.

In October 2016, Nigerian Finance Minister Kemi Adeosun railed against the West’s energy imperialism and the hypocrisy of using coal to industrialise and then denying it to Africans. “By telling us not to use coal they are pushing us into the destructive cycle of underdevelopment; while you have the competitive advantages, you tie our hands behind us,” she said.

Denying the world’s poor cheap electricity is the official policy of the World Bank. In 2012, Barack Obama agreed to the appointment of Jim Yong Kim as president of the World Bank, and the next year the bank stopped the financing of coal-fired generation. Although the Trump administration publicly opposes the coal ban and the US has the largest number of votes at the World Bank, the institution is doubling down on its anti-fossil-fuel agenda. At French President Emmanuel Macron’s climate summit in December last year, Kim announced the bank was extending the financing ban to upstream oil and gas.

Here is the first order of business for a global energy alliance: to pressure the World Bank to lift its hydrocarbon financing bans and serve the world’s poor rather than sacrifice them to a regressive climate agenda. As it is, China is the biggest winner from the World Bank’s energy policies. A World Bank report in June last year notes China’s “global dominance” in the supply of materials needed by renewable energy technologies. In addition to its control over the supply of base and rare-earth metals, last year seven of the top 10 global suppliers of solar panels were headquartered in China. An eighth is in Hong Kong and a ninth in Canada, but with Chinese links.

As long as the World Bank’s hydrocarbon financing bans remain, US taxpayers will be funding a war on American coal and subsidising China’s solar industry. If this seems an unappealing prospect, the Trump administration should move fast to assemble the neces­sary votes ahead of the World Bank meeting in October.

In the US, the climate caravan keeps rolling. In June, 13 Republican senators wrote to Trump urging him to submit the Kigali Amendment to the Montreal Protocol, described by the UN as “another global commitment to stop climate change”, for the Senate’s advice and consent.

Two weeks later, The New York Times carried a report and associated opinion piece by former senators Trent Lott and John Breaux on a new group, Americans for Carbon Dividends, which has hired the bipartisan pair to lobby for a carbon tax. “We must put a meaningful price on carbon,” they wrote, arguing for a $US40 per tonne tax, “high enough to encourage a turn to cleaner energy sources”.

Former US Federal Reserve chairwoman Janet Yellen, another member of the group, told The New York Times that taxing carbon emissions is “absolutely standard textbook economics”. The textbook actually teaches that a carbon tax would be efficient if it replaced all the tax credits, subsidies, portfolio standards and regulations supporting the expansion of uneconomic wind and solar energy. Their inherent defect is that the amount of energy they produce depends on the weather, not on demand. Because of the way the electrical grid works, they dump their intermittency costs on other generators, particularly the reliable coal and nuclear plants. It is not surprising that the backers of Americans for Carbon Dividends and its seven-figure annual budget include First Solar and the American Wind Energy Association.

Only a small portion of the putative climate benefits of a carbon tax would flow back to the US in the form of avoided climate impacts. In so far as cutting greenhouse gas emissions creates environmental benefits, it’s a vast foreign aid program in which costs are incurred domestically and most of the benefits go abroad.

‘Trump is breaking the spell of inevitability of the transition to renewable energy … Like socialism, the clean-energy transition will fail because it doesn’t work’

Worse still, US government estimates of the social costs of carbon still rely on climate models using computer-simulated data. These produce higher values than estimates based on actual climate data. Economists Kevin Dayaratna, Ross McKitrick, and David Kreutzer said in a paper last year that a $US37 a tonne carbon tax using model-based estimates for the climate sensitivity of carbon dioxide would be halved if based on empirical data. Dayaratna has also noted that one of the impact assessment models used by the Obama administration produces a negative estimate for the social cost of carbon under “very reasonable assumptions”. A negative carbon tax, subsidising carbon emissions, is hardly what First Solar and the AWEA are funding some of Washington’s most expensive lobbyists for.

For all the energy revolution so far, the Trump administration’s energy agenda remains incomplete. The Clean Power Plan is being rolled back, but the Environmental Protection Agency’s 2009 greenhouse-gas endangerment finding on which it stood remains in place. There has been talk of creating red and blue opposing teams of climate scientists to give politicians and the public a more balanced view of climate. On energy policy, Perry’s grid-security study can be extended to examine how wind and solar subsidies distort the costs of electricity. That way, Americans will begin to see the true price of renewables and the extra they will have to pay to keep the lights on, thanks to the intermittency problem of generating energy from the wind and the sun.

Exiting Paris was the first step. Trump has also ended his predecessor’s war on coal. Globally, the administration’s continued advocacy for energy realism can win friends among the world’s poor and make allies of some of the most dynamic economies. The geo­strategic potential of US energy is already being felt. American gas is being shipped to Poland and coal to Ukraine, reducing the region’s dependence on Russian gas. As Trump pointed out at the NATO summit last month, Germany’s pipeline will see it paying “billions of dollars” a year to Russia, although he subsequently undercut the strategic logic of his argument at the disastrous press conference with Vladimir Putin in Helsinki on July 16.

The administration should formalise its ties with other energy-realistic nations and show the world the benefits of US energy exceptionalism: jobs at home, booming exports and an escape from dismal energy policies predicated on bogus resource shortages. Having broken the spell, America and its friends around the world can reap the benefits.
The Australian