April 26, 2024 - 7:00pm
An overused phrase in American political discourse is that the government should “be able to walk and chew gum at the same time”. While this makes a pithy line, reality sometimes pitches the proverbial walking and chewing against each other.
The best example of this is the energy policy announced this week by Joe Biden’s administration, which tries to satisfy both the needs of industry and the energy-hostile preferences of the environmental lobby. “Under the Biden-Harris Administration,” the White House statement reads, “private companies have invested almost $80 billion in clean energy manufacturing. Strengthening U.S. clean energy supply chains not only benefits American workers but also makes it easier to deploy clean energy even faster to cut emissions.”
This is all well and good, but do these green initiatives really satisfy America’s energy needs? The answer is no, but Joe Biden is trying to fudge the issue. In the past, the White House tried to address this problem by simply outsourcing to the global markets. This is the reason why last year the US permitted increased oil exports from both Iran and Venezuela, easing the sanctions Washington was once adamant about enforcing, or why Biden asked Ukraine to show restraint in attacking Russian refineries.
But if rogue regimes are allowed to fill their coffers, they tend to become harder to control. Flush with new revenue, Iran could afford to support Hamas and even launch a combined missile and drone attack on Israel, while Venezuela has begun to threaten its neighbour Guyana. Consequently, after a period of relaxation, sanctions now have to be strengthened again. That these policies would be short-lived was obvious if one were to have looked at the US corporate sector and its desire to relocate production back to North America and create more resilient supply chains. This would include resources such as rare earths and fossil fuels, but also another crucial input factor: electricity.
The United States is locked in a heated competition with China about who will take the lead in the ongoing AI revolution, and there is — apart from the necessary hardware — nothing more important for the running of sophisticated algorithms than electricity.
Even modest scenarios assume that in the near future additional yearly electricity needs will be as large as the entire electricity use of a medium-sized country such as Sweden or the Netherlands — not including the push for EVs, which will create another huge peak in demand. The required data centres will consume energy throughout the day, so the idea that weather-dependent wind or daylight-only solar renewables can satisfy these new requirements is delusional. More traditional forms of electricity production will be needed as backup.
Yet Biden’s Environmental Protection Agency (EPA) has now created additional requirements for the operators of fossil fuel-fired power plants, causing experts to worry that they will simply throw in the towel, creating an unreliable electricity grid at a time when reliability (and low prices) are more needed than ever.
In addition to slow rolling oil and gas licences and hampering electricity producers, the current administration is now also targeting mining operators. A recent mining project in Alaska was cancelled, ensuring that China will remain the most important supplier of critical minerals, a market that is already almost two-thirds under Beijing’s control. Without these minerals, however, the current building boom of chip factories will soon run out of steam, since without the required raw materials even the best factory cannot continue production.
Even the cleanest-looking technology, such as semiconductors or EVs, has a dark underbelly that consists of the mining and raw materials production needed for those industries. Biden has pretended that citizens can have one without the other, but reality is about to catch up with him.
Ralph Schoellhammer is assistant professor of International Relations at Webster University, Vienna.
Raphfel
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SubscribeWhen you pursue silly and destructive policies purely for political reasons, bad things happen. Who wouldya thunk.
I’m sure in 5 yrs when we’re all reaping the inflationary effects of supply shortages the Democrats and the Media Establishment will claim it was “Bipartisan.”
Probably just blame Trump.
This administration and its allies are a mammoth cancer on America and the world. November 5th can’t come soon enough.
‘ensuring that China will remain the most important supplier of critical minerals, a market that is already almost two-thirds under Beijing’s control. Without these minerals, however, the current building boom of chip factories will soon run out of steam, since without the required raw materials even the best factory cannot continue production.’
And yet they are still continuing to impose sanctions on anything and everything that suits them. Still they continue to sanction china and Russia.
The copper price is going through the roof again partly because of new sanctions on Russian copper.
Copper is very important for transmitting electric, prices are apparently only going to go up now for a while, net zero gets more expensive every time the price moves up.
Sanctions and net zero are going to kill the wests economies.
There is something peculiar going on with with the DOE loan program. More than one conditional recipient is balancing on the precipice of bankruptcy and the conditions for loan closure are not public. There appears to be a thick layer of bureaucracy that puts us at a national disadvantage. It would be great if an investigative journalist looked into this program more closely.
Perhaps another Solyndra? Another page out of Obama’s playbook?
Taking the USA from being energy independent to beholden to the likes of Russia, Iran, and Venezuela is bad enough. Turning a blind eye to the consequences of dependence on China for strategic minerals, and living in a fantasy world that current and future energy needs will be met with renewables without heavy investment in nuclear is delusional.
November 5 can’t come soon enough, indeed. Biden makes Carter and LBJ look good by comparison.
Relaxing sanctions on Iran and Venezuela are fossilized remains of the Democrats’ historic appeasement of enemy states, in the second case enhanced by the administration’s desire to help Communist countries take over their neighbors.
The confluence of these polluted streams is energy policy, an area where problems are ideally featured to be solved by markets. There are more than enough well capitalized auto makers to make whatever car is best for drivers’ needs and wants. Big oil and big electricity have plenty of money to develop, and be first to market with, whatever breakthrough energy sources arise.
The prospect of being the new John D. Rockefeller or JP Morgan or Alfred P. Sloan doesn’t need piddling tax credits or hectoring legislators to waken it.