In the face of a changing fiscal and political environment, Congress and various states are belatedly rethinking their far-flung efforts to restructure and regulate the nation’s energy markets. The opportunity is to change course and base their actions on facts, not emotion–and slow down and even reverse governmental largesse. The global warming scare has been cut down to size, after all, and the problems of politically dependent energies are more evident than ever.
Too many legislators and interventionists cling to basic energy myths, however. Here are five major ones.
Myth: Foreign Oil Provides Most of Our Energy
According to the U.S. Department of Energy and the Energy Information Administration, oil represents less than 40% of our energy use. A full two-thirds of that oil comes from North America, primarily Canada, not the Middle East.
A related myth is that alternative energy sources will reduce the use of petroleum. Such sources may first reduce domestic production, but they will not appreciably affect production in unstable regions.
Renewable technologies are subject to import and price security concerns as well. And the equipment for 65% of the wind installations in the U.S. in the past five years have come from foreign sources, including China. Moreoever, rare earth metal ores such as lanthanum and neodymium are vital to electric car batteries and some renewable energy are concentrated in China, for example, and Beijing favors export restrictions.
Myth: Renewables Will Replace Conventional Energy Sources
A correlated and persistent myth is that increasing wind- and solar-generated electricity will reduce our dependence on foreign oil and thus boost our energy security. Less than 1% of our electricity is generated using petroleum, so any renewable generation will have no appreciable effect on petroleum demand.
Activists and regulators believe that energy companies will not invest in clean reliable energy, so we need government programs to do so. This ignores the reality that energy companies are investing huge sums of money to develop cleaner and more reliable sources of energy.
The U.S. is expected to increase its energy demand by 19% over the next two decades. To meet this growth, U.S.-based oil and gas companies from 2000 to 2007 invested an estimated $121.3 billion on emerging energy technologies in the North American market, most of which is in frontier hydrocarbons. This expenditure represents 68% of the estimated total of $180 billion spent by U.S.-based companies.
Despite considerable publicity on their behalf, renewables will remain a small fraction of our energy mix for the foreseeable future.
Myth: The U.S. Is a Disproportionately Large Polluter
The U.S. consumes large amounts of energy and produces a large proportion of the world’s goods and services. But does the U.S., as mythology has it, emit a disproportionate amount of the world’s greenhouse gases? Energy-related emissions of man-made greenhouse gases, after all, represent more than 80% of all anthropogenic emissions. Emissions and energy use are linked.
In 2008, goods and services produced in the U.S. accounted for 30% of all of the world’s production as measured by gross domestic product. In the same year, the U.S. share of global greenhouse gas emissions was about 19%.
And the news is good for the U.S. emissions of the criterion pollutants Carbon Monoxide (CO), Ground-level Ozone (O3), Lead (Pb), Nitrogen Dioxide (NO2), Particulate Matter (PM), and Sulfur Dioxide (SO2). Here are the percentage declines between 1980 and 2008:
Carbon monoxide: 79% decline from 1980
Ground-level Ozone: 25% decrease from 1980
Lead: 92% decrease from 1980
Nitrogen Dioxide: 46% decrease from 1980
Particulate Matter: 19% decrease from 1980
Sulfur Dioxide: 71% decrease from 1980
All this has occured during a time when fossil fuel usage significantly increased–and further emission declines are expected as oil, gas, and coal combustion grows in future years and decades.
Richer countries are actually cleaner and healthier countries. It is the affluent society that does not want to be the effluent society, as various environmental analysts have noted. In fact the U.S. is more efficient and effective than elsewhere.
Myth: Energy Efficiency Cuts Energy Use
Prevailing mythology also favors federal mandates for higher-mileage cars in the belief that this means less energy consumption. This ignores the reality that increased energy efficiency leads to increased energy use overall–the so-called Jevons Paradox.
In the case of vehicles, the fuel efficiency, as measured by Corporate Average Fuel Economy (CAFE), has led to increased driving, and — along with changing land-use patterns and increases in population — to increased consumption.
Some hold that forcing drivers to use alternative fuels will help solve global warming. Such fuels, unfortunately, do not necessarily result in lower greenhouse gas emissions.
Myth: Increased Oil Production Can’t Be “Green”
Expanding domestic oil production would reduce imports and even help improve the environment. Less than 1% of all oil found in the North American marine environment comes from offshore oil and gas development. According to the National Academy of Sciences, 60% of oil in the marine environment is the result of natural oil seepage through the ocean floor. In many places, it is even higher.
For example, all of the tar on the beaches of Santa Barbara is from natural oil seeps. Reducing oil reservoir pressure through extraction of petroleum will decrease oil pollution from natural seepage. New drilling technology, developed by private energy companies, has greatly reduced the risk of oil spills.
Reality-based Energy Policy
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” That adage, attributed to Mark Twain, applies in particular to energy. Energy myths have consequences their advocates prefer to ignore. Policy based on myths could easily curtail our energy supply, drive up prices, and even increase pollution, all without an increase in energy security.
On the other hand, a common-sense energy policy based on facts stands the best chance of increasing our supply, lowering prices, trimming emissions, and boosting our overall energy security. If that is indeed their goal, policy makers, the media, and the public should reject energy myths and stick to the path of reality.
That way alone leads to energy abundance and security for America.
Thomas Tanton is president of T2 & Associates and senior fellow in energy studies at the Pacific Research Institute. Mr. Tanton’s previous employment includes serving as Vice President and Senior Fellow, Institute for Energy Research; General Manager, Electric Power and Research Institute (EPRI); and principle policy advisor, California Energy Commission (CEC).