An Energy Agenda for a New Administration

Every presidential election brings an opportunity to replace energy myths—such as scarcity, independence, security, environmental risk, and government prescience—with a hard-headed, fact-based energy policy. Such a policy would end government “prescience” that has wasted taxpayer dollars on attempts to develop and promote alternatives to fossil fuels and to use the levers of government to reduce our use of fossil energy. Policy guided by wishful thinking has produced one flawed policy after another.

Since the 1970s, energy policy has been driven by excessive concern over scarcity imports, and environmental hobgoblins.  Instead of running out of oil, world proven reserves have grown and technology has helped to create an oil and gas renaissance, which has led to lower imports and the United States becoming an important exporter.  

Some argue that imported oil creates a national security risk, even though major suppliers are not from the Middle East. Our national security interests in that region predate import dependency, reflect our relationship with Israel, and are based on the role we have assumed to protect the Persian Gulf.  The spread of radical Islamic terrorism reinforces our military commitment to the Middle East.

The environment has been misused to drive energy policy. Proponents of replacing fossil energy claim the environmental risks are too great to continue our use of fossil fuels. Since 1989, this argument has shifted from air quality to climate change. While the environmental arguments of dread persist, the facts are that air quality continues to improve, U.S. carbon emissions have been declining, and the climate orthodoxy has been falsified by science.

The foundation for much of our energy policy is the assumption that government is smart enough to legislate technology-forcing mandates. Hundreds of billions of dollars have been wasted without politically favored technologies becoming commercially viable, in spite of subsidies and mandates.

Policy makers have not learned that energy, an essential input for robust economic growth, needs to be abundant and affordable. Making energy more expensive is a drag on economic growth and represents a regressive tax on those who can least afford to pay more.  An energy policy based on realities would help our economy regain the levels of growth experienced for most of the past three decades.  Our leaders have yet to learn that technology cannot be wished in place to meet political expectations and timetables. Industrial policy from Washington breeds corrosive crony capitalism.

Congress and the White House have failed to come to grips with major public policy issues facing our nation. Polarization has taken us down the road of stagnation. Common ground on energy ought not be hard because of its importance to economic and job growth. But common ground requires a policy based on reality­—-economic, energy, and technology.

January 21 2017 could begin a new day and open up new opportunities to get our national energy policy right.  There are six actions that the next Administration and Congress should take to make our energy and economic future brighter.

First, allow for the aggressive development of domestic oil and gas reserves. That will lead to further reductions in imports and job-creating investments.

Second, assure that emission standards are tough but realistic. As the composition of our economy continues to shift, the importance of electricity increases. We need a policy that makes sure that natural gas, coal, and nuclear power can meet a growing demand economically, while complying with realistic environmental requirements.  In the case of both power plants and mobile sources, regulations need to be based on the best available science and not worst-case assumptions.

Third, Congress and the Administration need to come to grips with the nuclear waste disposal issue. There is no technical reason for not using the Yucca Mountain site.

Fourth, commit to a long-­‐term basic research program to produce the knowledge needed for advances in technology and innovation. That is the best way to meet long-term energy needs in an efficient and effective manner. We have a comparative advantage in technology development and should enhance it. Government should swear off trying to pick winners; history proves it can’t.

Fifth, establish a more enlightened risk-based approach to regulation. The Code of Federal Regulations has grown from 100,000 pages in 1980 to almost180,000 pages by 2015. Regulation gets layered upon regulation without periodic re-­‐assessment of existing regulations.  The regulatory burden on society continues to grow in complexity and cost. We need a new regulatory model that places emphasis on using high-quality data, objective and comparative risk and cost-benefit analyses, transparency, and effective Congressional oversight. 

Finally, there should be a “look back” process—periodic reassessments of the effectiveness of energy policy so adjustments can be made as necessary. Like Lewis and Clark’s exposition of the West, policies should be adjusted as new knowledge is available.

We cannot afford to continue the march of folly of the past.  Energy policy is too important to be a pawn in political chess. The next president simply needs the courage and conviction to do the right thing and let the chips fall where they may.

William O'Keefe is the President of Solutions Consulting. You can follow him on Twitter here.

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