As energy prices skyrocket and Europe considers whether to follow the new U.S. ban on importing Russian oil and gas, policymakers should consider how to build a stronger energy system, better prepared for future disruptions.
In recent weeks, opposing voices have argued that record prices driven by the Ukraine crisis mean that the world must accelerate its transition to cleaner energy sources or, conversely, that it must pause it. But in reality, this crisis does not bear on the important question of how quickly to move away from fossil fuels. Instead, it underlines a different global challenge: the fragility of energy supply chains.
The U.S. must rise to the challenge and build robust, reliable and even at times redundant, energy supply chains to bring us out of this crisis and prepare us for the next one.
The problem with arguments about the pace of the energy transition is that an orderly transition has two parts: first building new energy infrastructure and then restraining, and eventually retiring, older energy infrastructure.
One of the main reasons for the current crisis is that the world has gotten these two steps out of order. Governments and litigants have developed legal tools to stop new fossil fuel infrastructure. Think of the demise of the Keystone XL oil pipeline, the Jordan Cove natural gas export facility, or the Constitution gas pipeline. But we have not built enough geothermal and nuclear power, or enough new power lines to bring renewable energy to market.
U.S. must build the infrastructure to support new energy sources before restraining and retiring existing sources.
In fact, the legal tools developed to stop oil and gas projects, such as expanded environmental reviews and state permitting challenges, are now used to stop the infrastructure that could bring clean energy to market. The focus on further subsidies to renewable energy is beside the point when what these maturing energy sources really need is permission to build power lines to take them to market.
Nor is it helpful to respond to high oil prices with a simple demand for a faster transition. The dangers of banking on low oil prices are not new. The 1973 Arab oil embargo permanently knocked the world off its previous high-growth trajectory. For nearly 50 years, the world’s biggest economies have been desperately seeking ways to reduce their reliance on oil – mandating efficiency and supporting alternative energy sources.
They have made progress, but oil is difficult to replace because its high energy density makes it so useful. It powers the international travel that drives the global economy because there is so much energy packed into every gallon of oil. Air and ocean travel rely almost solely on oil because oil is the energy you can carry with you. Until we develop equally useful, dense and portable energy sources, we will keep using oil.
The United States and the world can and should make even more rapid progress toward alternative sources of energy, but it will take time and there will be disappointments. The key is that U.S. must build the infrastructure to support these new sources before restraining and retiring existing sources. Policymakers are currently learning this lesson the hard way.
In a matter of weeks, Germany has been forced to reconsider its long-term plan of closing down its nuclear plants. And the Biden administration has now completely reversed its campaign promise to ban drilling on federal lands – first asking oil and gas producers to increase drilling and now even blaming them for not drilling fast enough.
It is too late for any easy solutions to the current crisis. After months of holding up and slow-walking oil and gas permits in the United States, the administration now feels it must ask repressive regimes in Iran and Venezuela for more oil. But the best hope for more oil and gas production is in the United States. And the government must remove the barriers that are holding back all sources of energy development.
The administration must work with Congress to speed up environmental reviews and permitting of all energy projects. Many of these environmental reviews are being bogged down in disputes about climate change that should be resolved at the national level rather than relitigated in every permit application. And Congress should provide more reasonable and timely workarounds to state vetoes of interstate energy projects.
We must build a way out of the current energy crisis and ensure that when the next one hits, our energy system has the varied and resilient infrastructure needed to meet it.