Terry H. Schwadron
Oct. 16, 2021
This week has brought a remarkable juxtaposition of energy-related headlines, with the usual over-simplifications belying the complicated conflicts that underlie our current situation.
Naturally, the big focus is on immediacy, so headlines underscoring rising gas and oil prices, the prospects of higher heating oil prices this winter and more-than-immediate inflation scares taking up more than its share of attention.
The almost unchallenged narrative of the week centers on rising prices leading to economic slowdown — and inevitably, to blame for Joe Biden and his Democratic administration, for gridlock, for bad weather or just a worsening season of slow recovery because of covid.
But, as it turns out, there were several news articles highlighting confusing developments, policies, and investments that either start with concerns about climate over that immediate demand or that remind us that the ever-present greed for profit will push all other concerns to the side. We even made a big deal about William Shatner spending four minutes in weightless space thanks to Jeff Bezos, but talking much longer about the need for climate controls before turning back to gas prices.
What made this week stand out, however, was to see all of it happening at once — both in the United States and around the world.
Here were a few examples:
· Rising prices for gas and oil, blamed on everything from supply line slowdowns to international competition for profit, suggest that U.S. households will be paying more at the pump and to heat homes this winter. A report released Wednesday by the Energy Information Administration predicts increased home heating costs will go up because fuel prices are rising, demand as businesses and offices return from last year, and some supply losses from oil pipeline spills and hurricanes. Obviously, almost nothing answers U.S. consumers faster than paying more for fuel.
· The Biden administration announced it is opening the entire U.S. coastline to wind farms by 2025. Interior Secretary Deb Haaland said her agency is beginning the formal process to identify and lease demarked areas as part of long-term strategy to produce electricity from offshore turbines. Months ago, the government okayed the first major commercial offshore wind farm off Martha’s Vineyard in Massachusetts. It’s a major push to move away from fossil fuels.
· At the same time, The New York Times reports that private equity funds are doubling-down on oil,pouring a ton of new investment into oil and gas, whether American-produced or not. Even as the oil and gas industry itself diversifies into renewable energies, “private equity firms — a class of investors with a hyper focus on maximizing profits — have stepped into the fray. Since 2010, the private equity industry has invested at least $1.1 trillion into the energy sector — double the combined market value of three of the world’s largest energy companies, Exxon, Chevron and Royal Dutch Shell, according a new analysis by the Private Equity Stakeholder Project, a nonprofit that pushes for more disclosure about private equity deals. Only 12% of their investment went into renewable power, like solar or wind, since 2010, though those investments have grown at a faster rate, according to Pitchbook data.Ah, profit.
· China, the world’s biggest polluter, promised it was pulling back from coal to produce electricity, but then this week announced a national rush to mine and burn more coal to help its suddenly lagging manufacturers. The New York Times reported that mines that were closed without authorization have been ordered to reopen, as well as coal-fired power plants. Financial incentives suddenly abound for coal, and local governments have been warned to be more cautious about limits on energy use that had been imposed partly in response to climate change concerns. In other words, someone should cut coal, but not us.
· In the Middle East, Africa and Latin America, government-owned energy companies are increasing oil and natural gas production as U.S. and European companies pare supply because of climate concerns. To make up for oil cutbacks by Western companies, state-owned oil companies elsewhere are increasing production — and cost.
The Lessons: Complicated
By the time these stories — each of which is somewhat layered and worth more than a passing thought — get to television, they turn into one-liners. It’s wrong to understand them as pro- or anti-climate, as pro- or anti-business or any political interpretation that commentators cannot help themselves from pushing.
Rather, we might see them as the difficulties in helping to direct the massive shift in energy policies and environment, or even in reversing our decade-long trends of addiction to oil and gas.
It is easy to let slide that the United States has become a net exporter of oil, gasoline, natural gas, and other petroleum products as well as the principal leader of any international efforts on climate.
The next international climate summit is just ahead in Glasgow, coming as the U.S. Congress, because of two recalcitrant Democratic senators and resistance from the entire Republican caucus, refuse to look seriously at passage of a major spending bill to advance non-fossil fuel-based energy alternatives.
It remains relatively amazing that, as a country, we can neither find consensus to heat our homes or fuel our cars at lower prices or commit to an energy policy based on quickly building up solar, wind and other alternatives.
The headlines tell us that despite our best thinking, profit, short-term individual interest, and immediacy remain our biggest national values.