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Can a New Political Consensus be Found to Keep a 75-Year Supply of Natural Gas from Dooming Renewable Energy?

Posted in Capital and Funding, Legislation, Natural Resources and Environment, Technology

In an April 12, 2012 article in the New York Times, Jad Mouwad wrote about the transformation in United States’ energy fortunes that is fundamentally changing much of what we thought we knew about domestic and international realities.  After decades of viewing ourselves as energy depleted, he writes, the United States now finds itself cutting deeply into its demand for foreign oil, and more importantly, with a glut of natural gas.

A combination of better fuel efficiency and increased domestic oil production have significantly reduced oil imports into the United States over the last six years.  Thanks to new CAFE standards for automobile fuel efficiency, that trend is expected to continue.  With recent developments in hydraulic fracturing and horizontal drilling, moreover, Mouwad reports that conservative estimates are that the United States now has a 75-year supply of natural gas.  City-gate prices for natural gas are now less than half their 2008 peak.  Futures prices have plummeted over the last year.

And Mouwad points out the many benefits that may come with an energy-rich future.  The United States’ dependence on politically unstable countries that don’t like the United States will lessen.  The United States’ trade deficit might be cut by 60 percent by the end of the decade.  American manufacturing may see resurgence, as low-cost energy is one of the factors that manufacturers are attracted to.  Conversion from coal to natural gas for electrical production suddenly gets easier, making possible the earlier retirement of heavily polluting electrical plants in much of the eastern United States.  Retailers will see lower prices as costs of transporting goods go down.  In a country weary of the Great Recession, that is all good news.  It includes some good news for the planet, because although burning natural gas puts carbon dioxide into the atmosphere, it has lower emissions than either coal or petroleum.

But – abundant natural gas will fundamentally skew the economics that have encouraged development of renewable energy or more efficient use of energy.  Today we have technologies that could greatly reduce our consumption of fossil fuels.   Co-generation is a classic example.  Many, if not most, industrial processes waste huge amounts of energy in the form of heat or partial combustion.  Co-generation could today take that wasted energy, turn it into electricity, and send it out to the local or, if properly situated, the regional grid to reduce the need to burn fossil fuels at electrical generating plants.  Dairy digesters can turn dairy waste into electricity – powering local communities with what once would have polluted their rivers.  But co-generation plants and dairy digesters require significant capital investments, and those investments only make sense if electrical rates will support them.  Scientists are hard at work developing better batteries to store electricity, which would make wind and solar power far more useful, if power generated when the weather was right for creating electricity was available when that electricity was needed.  The next 20 years could see development of new technologies that radically change the need for fossil fuels.  But again, that research takes money and bringing a new technology from prototype to scale takes major investments.  In the world of 2006-2008, there was a will to make those investments.  It was the product of a political consensus among environmentalists on the one hand and consumers dreading increased energy prices on the other.

Will a political consensus exist, or can it be created, if increased oil production combined with abundant natural gas keeps the price of fossil fuels low?  Nancy Sutley, head of the White House Council on Environmental Quality, was in Seattle this past Thursday, to see what Seattle is doing to innovate in the fields of green energy.  And, Seattle is arguably doing a lot.  Seattle City Light, Mayor Mike McGinn told a reception for Sutley sponsored by the Greater Seattle Chamber of Commerce, is carbon free.  It made its garbage haulers convert their trucks from diesel to compressed natural gas, a process developed by a company in Renton.  Seattle is building some of the lowest energy-use buildings in the world.  It has set a goal of being carbon neutral by 2050 – and it is taking steps towards that goal.  But, Seattle is one of the most liberal, progressive, greenest cities in the nation.  Its enthusiasm for energy conservation is not shared in parts of King County, much less across Washington State, and far less across the United States.  There are pockets where energy conservation and innovation will remain politically correct and where such efforts will continue.  But listening to Sutley, who extolled what Seattle was doing and how nice it was to see, but had little to say about how that might be translated into national policy, it was clear that Seattle is an outlier.  In the current political environment, there is no reason to think any politician will spend much political capital to increase research funding, increase economic support for investment in new technologies, or increase the cost of carbon so that new technologies are more cost competitive in their early stages.

What that suggests, however, is that creative politics are essential.  I don’t have the answers.  But I am reminded of the story my law school professor, Burke Marshall, told of his days as head of the Civil Rights Division of the Justice Department for President Kennedy.  It was clear that major legislation was the only way to make essential progress on civil rights.  Without legislation, segregation would continue unabated.  But President Kennedy faced a certain filibuster by Southern Democratic senators.  And Northern Democrats didn’t have the votes to end the filibuster.  Midwestern Republicans had constituents who either weren’t concerned with civil rights or who would oppose federal involvement in local and personal decisions.  So based on politics as usual, there was no hope.  But that wasn’t acceptable.  The solution?  The Civil Rights Division quietly started working with the National Council of Churches to make civil rights a moral issue.  When Protestant preachers started talking about civil rights in the Midwest, conservative Midwestern Senators like Roman Hruska  started listening.  And ultimately it was a coalition of Northern Democratic and Midwestern Republican Senators who broke the filibuster and passed the 1964 Civil Rights Act.

Is that a direct analogy?  Undoubtedly not.  But it does suggest that those concerned with supporting the technological change that will reduce American dependence on fossil fuel need to be looking for who else, other than liberal pockets and purebred environmentalists, can be brought to the task of marshaling votes.  A 75-year supply of natural gas is but a moment in time when compared to the time it takes to make new fossil fuels.  That means we would be running out of natural gas about the time my grandchildren approach retirement age.  At the same time that we celebrate and appreciate the benefits that we will reap from abundant natural gas, the task of replacing it must continue unabated.