Global energy crunch could leave Americans in the lurch
Lately, Americans have been watching the news with concern. That’s because tight global supply chains are causing shortages for many everyday products. And at the same time, energy prices are rising dramatically, with supply failing to meet the demands of economies reemerging from the COVID pandemic.
Soaring energy prices are already hammering European and Asian consumers.
But they may hit U.S. consumers this winter, too. Gas- oline prices are rising, heat- ing oil prices have jumped more than 60 percent in a year, and natural gas costs have doubled in just the past six months.
Along with rising energy prices, the reliability of the nation’s electricity grid has also become a question mark. Blackouts and power outages have become increasingly common in California, Texas, and other states.
Despite these concerns, the Biden administration is pushing ahead with plans for a carbon-free U.S. power sector by 2035. To do so, the president aims to dramatically increase wind and solar generation — so that the U.S. can reach 80 percent emissions-free power by 2030.
Such a heavy reliance on weather-dependent sources of power will bring immense technical challenges — and the price tag will be extraordinary. But a lack of planning for safe grid reliability is the most troubling.
The Biden administration envisions a program that would offer many billions of dollars for utilities to deploy wind and solar capacity. However, there is no clear planning on how the nation will accommodate all of this new, intermittent power — or provide adequate incentives to ensure simultaneous backup power when the weather doesn’t cooperate.
Sen. Joe Manchin, D-W.Va.,, likely the deciding Senate vote on the plan, has already warned that, “We are going to leave ourselves in a situation by 2030 that we are not going to have reliability.”
Grid operators and utilities are equally worried. One regulator from the Federal Energy Regulatory Commission — which oversees the nation’s electricity markets — has warned that the proposal would be like, “effectively dropping an H-bomb into the middle of them,” adding, “consequences will be profound, disruptive, and incalculable.”
We are already getting a preview of this across the Atlantic. Europe’s race to dismantle traditional energy infrastructure, curb investment in fossil fuel production, and embrace renewable energy has left it woefully short of the energy it needs this winter — and increasingly dependent on Vladimir Putin’s natural gas.
U.K. electricity prices have now soared to record levels. Surging natural gas prices and low renewable output have also caused electricity prices in Spain and Portugal to triple over the past six months. And Germany’s transition toward full-scale wind and solar power has boosted the country’s electricity prices to three times the U.S. average.
The road ahead calls for caution. America’s energy transition requires careful planning that builds on the shoulders of existing energy infrastructure. Policymakers must ensure reliable and affordable power — instead of clumsily dismantling it. U.S. consumers already face rising energy prices this winter. Bad policy shouldn’t serve up another energy crisis as the next course.