What's at stake in the Build Back Better bill
Europe's energy crisis is a warning for America
As congressional Democrats continue to push their $3 trillion green energy bill and the U.N. General Assembly meets this week during "Climate Week," a crisis across the pond is foreshadowing what may happen as America looks to achieve net-zero carbon emissions and meet the goals of the Paris Accord.
European nations are experiencing record surging natural gas prices, resulting in halted operations and a rise in energy prices for consumers that have gotten so high some countries have been forced to take action to subsidize customers' bills. Natural gas futures in the United Kingdom and all over Europe climbed double digits this week, and in the UK, gas prices have risen more than 250 percent with some firms expected to collapse as a result. Energy bills are now expected to go up by 20 percent for households across Europe, according to Citigroup. Greece and Spain have now announced subsidies to lower bills while France and others are now saying they are considering the measure.
What's to blame? European countries like Germany and others have for years moved to restrict fossil fuels - citing the need to address climate change and meet the goals of the Paris Accord. Europe has heavily subsidized weather-dependent renewable wind and solar energy, shutting down its coal and nuclear plants. Yet global demand has skyrocketed as COVID-19 restrictions are lifted and at the same time, the wind in the North Sea has suddenly stopped blowing over the summer, leading to gas and coal making up for the shortfall. Not surprisingly, prices are blowing up.
Other factors at play also stem from Europe's decision to shut down fossil fuels at home. Russia, Europe's top exporter, is not sharing as much gas as it traditionally has with Europe, and stronger demand for liquified natural gas (LNG) imports in Asia has diverted LNG cargoes away from Europe. But Europe's over-reliance on imports is again the inevitable result of a disingenuous policy of banning fossil fuels to address climate change with the full knowledge that fossil fuels will still have to be used in the mix from somewhere else.
Europe's approach to fossil fuels is hypocritical and, frankly, scary because America is planning the same course. President Biden and Democrats are still intent upon passing a massive spending bill that will cost taxpayers trillions in subsidies for wind and solar - sound familiar? The bill will also force a new, $150 billion dollar Clean Electricity Performance Program (CEPP) that would require utilities to buy or produce a set amount of renewable energy. Companies that meet the standard would get federal dollars, companies that don't would face punitive, steep fines. Unsurprisingly, natural gas is not included in CEPP. These types of policies will move America toward a very vulnerable place from an energy affordability and reliability standpoint right when rising inflation has already hit consumers hard.
It seems that no matter how many examples are pointed out about the dangers of over-reliance on renewables, policymakers continue to press on toward the same dangerous path of completely banning fossil fuels. The result won't be lower emissions at the end of the day when natural gas and coal are needed to cover wind's shortfalls - but there very well could be energy price increases like America has never seen before.
Beyond affordability and the need to supply our country with energy during the winter months, the crisis in Europe demonstrates the continued geopolitical significance of gas. The real winners of America's move to electrify everything will be Russia and China. Russia heavily supplies China with more and more LNG while Biden insists that America curtail domestic production that can be exported, not to mention that in a net-zero world, China controls 80 percent of lithium-ion battery supply chains and also dominates the rare earth mineral supply chains for electric vehicles.
It's time for lawmakers to confront this reality before it's too late and get real with Americans about what can reasonably be expected during a transition to net-zero. Fossil fuels simply can't be replaced in the energy mix at this stage, and the costs of heavy subsidies and punitive policies are putting American consumers at risk. Republicans in particular need to show that they stand "for" something when it comes to addressing climate issues and not just be against policies proposed by Democrats. Investments in technologies like direct air capture and carbon capture and storage are a good start. But policymakers of both parties must confront reality and come together in a bipartisan but realistic way to prevent a European-style energy crisis in America.
Samantha Dravis is a visiting fellow at the Independent Women's Forum. She previously served as senior counsel and associate administrator for policy at the U.S. Environmental Protection Agency under former President Donald J. Trump.