A Crisis In Confidence – Déjà vu

Executive Director’s Corner

Dear All:

When I read what’s going on in the world today, I’m reminded of the aphorism, “when the bad days become the good old days in the downward spiral that is life.”

With a weak response from our nation’s leaders to Russia’s invasion of Ukraine, hyperinflation, stratospheric gas prices, domestic unrest, economic sanctions, significant geopolitical shifts, a pandemic and climate change, it’s no wonder I and others are concerned about the future.

The price of a gallon of gasoline in the U.S. rose from $2.81 a year ago to $4.31 today. This is wreaking havoc on working Americans, but when asked in a CNBC interview how to fix the problem, U.S. Secretary of Energy Jennifer Granholm, fixated on how clean, renewable energy will save the day.

 “So, this is why increasing production and really increasing clean energy, transitioning to clean energy are the solutions for being able to reduce those prices at the pump.”

When CNBC reporter Sara Eisen pushed back saying, “But doesn’t clean energy just raise oil prices even more? Because we’re still dependent very heavily on fossil fuels and it’s very expensive to get there,” the Energy Secretary kept trying to build her case:

“It is not expensive. Clean energy is the cheapest form of energy, wind and solar are the cheapest forms of energy. So no, it does not in fact, if you drive an electric vehicle, not that everybody can afford one, but just if there were a transition to an electric vehicle and you filled up today at the pump with your vehicle, it would cost you maybe between $50 and $60 to fill it up. If you charged it at home, it would cost you maybe $12 to fill it up. So no, clean energy is abundant. It is cheap, it is accessible, and the prices continue to drop. And that’s why it’s very important for us to continue to press there are new technologies that make energy even more abundant and dispatchable and base like baseload power, those may not be quite ready yet but certainly on the renewable side, it is ready to go.”

Yes, commercial scale photovoltaics (PV) generated energy and land-based wind energy are cheaper than some forms of natural gas, coal and oil and according to Solar Central, “wind provides only 4% and solar about 2% of U.S. electricity and an electrical generation target of 20% solar and wind by 2040” is not beyond the realm of possibility.

But let’s not pop any champagne corks just yet as wind and solar are neither abundant nor reliable.

Both require significant upfront costs to commercialize, and their distribution is dependent on a complex global supply chain that is beginning to break down. When compared to fossil fuel reliability, they are uneven at best. Sure, solar is reliable in the Southwestern U.S., but not in the Northeast. And wind may be reliable offshore, along the Rocky Mountains, and in places with good orographic lift, but most places in the U.S. are dead zones for wind.

Regarding Granholm’s ‘charge your electric vehicle at home’ comment, I would remind her that less than 2% of U.S. vehicles are electric, and even though there’s burgeoning demand, that number is unlikely to rise significantly anytime soon. In 2021, Ford reported a 3-year backlog for its F-150 EV truck and that’s assuming they can count on suppliers to meet their sales targets.

America produces about 4% of the world’s oil, yet we consume almost 20% of it. China produces even less oil and now consumes almost 16% of it. As China continues its massive urbanization program, oil consumption will only rise. That will certainly lead to increased competition, and do you really think renewables will be able to address that?

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As a nation, we have a long way to go before we replace the gas pump with an electric plug. And truth be told, unless we focus on “demand,” we are never going to get there.

In my opinion, Granholm’s response verged on delusional and as the country’s energy secretary she should have offered a more prudent, honest and realistic response – maybe something like this:

“Look, I know Americans are hurting every time they fuel up, but there are no quick fixes. We are experiencing the consequences from believing we can have infinite growth on a planet with finite resources. Cheap oil, cheap nickel, cheap lithium and a host of other resources are becoming more expensive as they get scarcer, and the competition for them between countries is only going to increase. The Ukraine is just one example of this and don’t even get me started on food security. . .”  

Then, instead of a “let them eat cake moment,” she would’ve faced a “Crisis in Confidence” moment like President Jimmy Carter did in July 1979 when he delivered his speech of the same name.

At a time when the country was experiencing stagflation, and gas shortages, he appealed to Americans to take a deeper look at the root cause of our nation’s problems; to question their consumption habits and to commit to conservation and making changes that would give us more control over our own lives.

“It’s clear that the true problems of our nation are much deeper — deeper than gasoline lines or energy shortages, deeper even than inflation or recession. And I realize more than ever that as President I need your help. So, I decided to reach out and to listen to the voices of America. . . 
In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we’ve discovered that owning things and consuming things does not satisfy our longing for meaning. We’ve learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose. . . I ask Congress to give me authority for mandatory conservation and for standby gasoline rationing. To further conserve energy, I’m proposing tonight an extra ten billion dollars over the next decade to strengthen our public transportation systems. And I’m asking you for your good and for your nation’s security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel. Every act of energy conservation like this is more than just common sense, I tell you it is an act of patriotism.

Our nation must be fair to the poorest among us, so we will increase aid to needy Americans to cope with rising energy prices. We often think of conservation only in terms of sacrifice. In fact, it is the most painless and immediate ways of rebuilding our nation’s strength. Every gallon of oil each one of us saves is a new form of production. It gives us more freedom, more confidence, that much more control over our own lives.”

But, as Americans how can we have more control over our own lives when we can’t even control our own southern border?

And, how can we have more control of our own lives when so many essential products are manufactured overseas? Or, when so many U.S. jobs are outsourced to companies staffed with foreigners working in the U.S. on employment visas, and then those U.S. jobs are ultimately shipped overseas?

Sadly, the answer is we can’t. The people who shape our expectations and manufacture our consent hop planes to Davos, Switzerland for their marching orders versus spending time with their constituents and receiving their direction from us.

In solidarity.

 

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