The terrible effects of the presidential candidate’s plan to ban fracking wouldn’t be limited to the economy.
Editor’s Note: The following is the final installment of a three-part series adapted from David L. Bahnsen’s new book, Elizabeth Warren: How Her Presidency Would Destroy the Middle Class and the American Dream. Part I is here; part II is here.
What if a self-proclaimed environmental advocate produced a radical and costly plan to save the environment . . . that actually harmed the environment? Elizabeth Warren’s obsession with banning fracking, and other means and methods of energy that have played a key role in diminishing pollution, would accomplish precisely that.
American electricity generation has gone from 50 percent coal-based to 28 percent in a decade and is projected to be just 17 percent in 30 years. This, of course, has been made possible by American production of natural gas, which has skyrocketed as a source of electricity generation.
Renewables account for just 18 percent of electricity production. Even the most delusional, optimistic projections about the growth of renewables don’t predict anything more than 35 percent of electricity needs being met by renewables for decades. With $6.7 billion a year of subsidies to renewables, wind and solar still remain completely uncompetitive from a cost standpoint, and of course their weather-dependent intermittent nature makes them undependable as a source of electricity.
I oppose the $489 million of subsidies paid out to the fossil-fuel industry annually, but paying 14 times that amount to subsidize renewables has done exactly one thing: provide tax credits to reward well-heeled economic actors and distort the energy marketplace. Price discovery has long been absent from the renewable-energy space, as talented entrepreneurs endeavor to secure government tax breaks, not to innovate and, least of all, to create a profitable (sustainable) enterprise. Industries with long-term sustainability attract profit-driven actors; the players in industries reliant on government-crony handouts seek to game the system and have infinite incentives to delay the successful achievement of a goal.
This argument must not be taken as opposition to renewables in America’s energy policy. On the contrary, the removal of government favoritism and distortion would allow for a truly flourishing sector, and would optimize cooperation with the most talented entities in the energy sector, those large corporations Warren loves to demonize, who clearly must play a vital role in the evolution of American energy policy. Renewables will grow when they are shown to be profit-generating, and that revelation cannot come when subsidies destroy price discovery. That revelation cannot come when subsidies incentivize suboptimal behavior. Renewables are being hurt by the best attempts of politicians to help them.
A sensible and comprehensive national energy policy would seek a growing market share for renewables yet would recognize that we simply are in no position to see renewables meet anything more than 20 to 30 percent of our energy needs—no matter what we do to hurt the fossil-fuel industry—for many, many years. Warren has voiced her opposition to nuclear power, as we previously covered. So where would a ban on fracking leave us?
The immediate termination of natural-gas production in our country would mean one of two things:
(1) A ghastly reduction of access to electricity for American society (not going to happen); OR
(2) A reversal to coal as the source of electricity.
This is not controversial. It is the reason true environmentalists interested in reducing carbon emissions have long seen natural gas as a friend, not a foe, in the cause of combating climate change. Warren’s attack on domestic production cannot alter domestic demand, or global demand for that matter. American production of natural gas had been completely level for about 40 years before the fracking revolution began.
One would think that after the last several years no presidential candidate would want the appearance of a Russia-friendly policy agenda. It is ironic that for all of the shade thrown at the Trump administration regarding Russia (shade deserved after the president’s unforgivable performance in Helsinki), Senator Warren has made the centerpiece of her campaign the policy that matters more to Russia than almost anything else we could imagine: returning dominance of the energy sector to the oligarchs of Russia instead of the entrepreneurs of Oklahoma and Texas.
Russia should be the obvious comparative focus in this story because of natural gas, and because of the suddenly restored opposition to Russia that seemed to resurface in the Democratic party right around 2016. But alas, it would be highly disingenuous to ignore the crude oil/Middle East part of this story as well. In September 2019, American news-watchers were stunned to hear that a drone attack had taken down 50 percent of Saudi Arabia’s oil-production capacity, a headline that would have put the world economy into a tailspin just ten years earlier. Instead, oil prices rose to the price they had been at just four months earlier, and world financial markets barely blinked at the story. OPEC oil production is hardly irrelevant, but no longer do U.S. policymakers feel held hostage to Saudi wants and demands, as the U.S. has the supply capacity to meet American oil-consumption needs, and the production capacity to sustain it, indefinitely.
The U.S. economy has struggled since the financial crisis to achieve real growth in keeping with past trends. After the low-growth recovery years of the Obama administration, in which business investment lagged and capital expenditures were minimal, U.S. manufacturing, industrial production, and business confidence got a needed boost in the early years of the Trump administration. Corporate tax reform (repatriation of foreign profits, immediate expensing for capital expenditures, and a reduced marginal tax rate) as well as deregulation of financial markets played a significant role in this. But a more pro-growth, pro-energy framework led the way, as the energy sector geared up for exporting liquefied natural gas (particularly to China), and as countless energy-production and energy-transportation projects finally received federal approval. The trade war has recently taken back some of those gains in the business sector, but the Warren posture toward energy would put capital expenditures on hiatus. The Warren agenda would freeze the U.S. manufacturing sector. The heavily misguided Warren policies would take one of America’s most popular and needed products (natural gas) and eliminate our ability to produce it and the world’s ability to buy it from us. One does not need an advanced understanding of macroeconomics to see how detrimental these measures would be to the growth of the American economy.
American carbon emissions have declined a stunning 14 percent since 2005, and there is absolutely no ambiguity as to why. The fracking revolution enabled a greater use of natural gas for American energy needs, and natural gas is by far the cleanest fossil fuel. Yes, coal extraction and crude oil production have become marginally cleaner processes over the last ten to 15 years (thanks to a combination of stricter standards and greater technological innovation), but it is the enhanced market share of the cleaner natural gas that is most responsible for the drop.
The contribution of natural gas to carbon emissions relative to its share of U.S. energy consumption is 22 percent less than crude oil, and 85 percent less than coal. This measurable fact monitored year over year by the Environmental Protection Agency (and not disputed by leftwing environmental groups) is a by-product of the science of burning these respective fuels: natural gas releases 50 percent less carbon dioxide emissions than coal and 30 percent less than crude oil. These cleaner burning properties have made it the ideal choice for electricity generation but also a growing source for powering transportation fleets. Natural gas is cheaper than electricity as a power source in the home, and it is a cleaner source than coal as a means of producing electricity. Its price advantages are in direct proportion to our improved supply capacity, a supply capacity Warren is campaigning on ending.
Elizabeth Warren’s climate policy makes Barack Obama look like a Republican, and that is something every Democrat ought to consider. Her environmental agenda has not been as widely panned as Alexandria Ocasio-Cortez’s “Green New Deal,” which Warren herself endorsed, but it is perhaps more dangerous. Cortez’s plan represented the utopian fantasy of a freshman congresswoman elected by 14,000 people in her district. Warren is a Harvard Law professor with the potential to become the president of the United States.
One of the tragedies for me in the Green New Deal and Elizabeth Warren’s climate agenda is that I support an agenda of environmental stewardship and a sincere and aggressive focus on reducing carbon emissions. My opposition, unlike that of some of my conservative friends, is not driven by an apathy about global warming or disputes over climate science. I do not find all the data as unambiguous as many of my friends on the left do, and I certainly oppose the stringent and economically suffocating solutions many on the left offer; but I hope for a sensible environmental agenda that is realistic, economically productive, and scientifically cogent.
Warren’s proposals are not a step towards that agenda but many steps back. The radicalism of her policy plans will imperil the movement for environmental progress in profound ways. A serious, sober conversation about environmental stewardship does not start with “first day” executive orders. It does not start with transferring control of world gas production to bad state actors such as Russia and Saudi Arabia. It is driven by the art of the possible, the necessity of incrementalism, and the maturity of data-driven analysis. The desire to appease environmental extremists and youthful utopians gave us the Warren climate agenda.
For the sake of our national security, our national sovereignty, our economy, and our environment, may it never see the light of day.