Why attacks on the US fossil fuel industry are unproductive policy
In 1835 the noted French student of American democracy, Alexis DeTocqueville, observed that the U.S. was a dynamic nation, whose people tended to have strong opinions — not always justified. Headstrong qualities in the nation have led to bold innovation and extraordinary leaps forward, from the “impossible” Erie Canal in 1825, to landing a man on the moon in 1969. Scientific and technical innovations have constraints — if they have flaws, they don’t work. However, flawed political policies can cause great damage before they are resolved. The most fateful example was the Civil War.
Now the nation has another battle, this time over environmental and energy policy associated with concern over climate change. The positions of the two political parties and their supporters are at almost complete odds. A Pew Center poll showed that 59 percent of Democratic and leaning voters regarded climate change as a top priority, but only 12 percent of Republicans held this view.
Environmentalist criticism of the fossil fuel industry has been intensified by publications of Naomi Oreskes and Erik Conway, Robert J. Brulle and William S. Becker. These authors emphasize that fossil fuel companies had early information on global warming but subsequently carried on publicity and lobbying campaigns designed to diminish concern about the problem, and opposed active governmental policies against climate change. A leading environmental scientist, Michael Mann, has called corporations “the enemy.”
This writer suggests that while anti-industry attitudes may seem justified for the foregoing reasons and by the need to reduce greenhouse gases produced by fossil fuels, the past 40 years of mutual hostility between environmentalists and industry give no encouragement to the idea that greater hostility and harsher measures will yield progress.
An indication that the trends don’t favor continued hostility is that whereas Republican President George H.W. Bush supported the last major update of the Clean Air Act and issued a moratorium on oil and gas leasing in most of the U.S.’s offshore waters, President Donald Trump withdrew the U.S. from the Paris agreement on greenhouse gas emissions.
Research indicates that polarization is the main obstacle to U.S. progress against climate change. Successful nations have industry as an integrated player in national policy. This issue is critical for the United States, because it is by far the biggest cumulative contributor to atmospheric CO2. Its policies have led Swedish daily newspapers to refer to the U.S. as “an environmental gangster.”
Swedes can carp about the U.S. because they are ahead of schedule to the national goal of net zero carbon emissions, with 58 percent renewable energy as a percent total energy in comparison with the U.S.’s 11 percent in 2020. Along with its record as an environmental leader, Sweden has a robust industry and trade surpluses, whereas the U.S. has record trade and budget deficits. Let’s consider some hard facts.
Energy supply is a core requirement for nations. It correlates closely with economic development. At the beginning of hydraulic fracturing in 2006, the U.S. imported 57 percent of crude oil needs. Fracking enabled the U.S. to become a net energy exporter in 2020.
Because natural gas is the dominant product of fracked operations, it was available to replace coal in coal-fired power plants, accounting for a major fraction of our reduced emissions. The fact that U.S. natural gas costs a quarter of prices in Europe has aided the U.S. industrial and personal economy and helped make possible large federal outlays for infrastructure and renewable energy development. The U.S. became the largest supplier of liquid natural gas to Europe (27 percent) since the Ukrainian invasion.
An important consideration for reduction in fossil fuel use is that fracked oil and gas tracts has a shorter effective life and relies on continued drilling operations. Oil and gas from conventional reservoirs may produce for decades. Therefore, once renewable energy is more available, fracked petroleum can be discontinued more rapidly than conventional reservoirs.
A factor that plays a critical role in public policy is the fact that whereas Democratic and Republican voters agree on few issues, the one area in common, according to the Pew poll, is on the importance of the economy. Even the Biden administration, which is committed to green energy policy, recognized that too aggressive action against the oil and gas industry could create price shocks or interruption in energy supply that would lose popular support in an already tenuous political environment.
Whatever one might think of company policies, oil companies are among the most efficient and technically advanced industries in the nation. Overaggressive policies could demoralize industry and introduce the ENRON syndrome of companies adopting politically expedient policies.
Major environmental NGOs are not innocents in the U.S. conflict over energy policy, except for Environmental Defense Fund and the World Resources Institute, most prioritize attacking fossil fuel companies through lawsuits and blocking industry initiatives rather than promoting renewable or carbon-free energy development and other positive initiatives. Their antagonism is reciprocated by industry. Emphasis in industry leadership is on loyalty; new executives with progressive ideas are neither attracted to nor would be accepted by industry. Changing this paradigm is important, because industry’s technological and other resources are critical in transitioning to green energy.
Scandinavian nations and Germany have shown the way forward — though it may be hard to translate to the U.S. while the parties are so radicalized. In these nations, industry is a key participant in government planning for energy and environmental policies.
Government gains by taking advantage of industry information and perspectives and minimizes opposition, while industry gains insights on governmental goals and initiatives and can make recommendations. In short, industry becomes a partner in policymaking, rather than regarding government as the enemy, as in the U.S. An important step forward, if more cooperative policy were introduced, would be that U.S. companies, the American Petroleum Institute, and U.S. Chamber of Commerce, representing 3 million businesses, would have a stake in employing creative and open-minded leaders to participate in government planning.
Frank T. Manheim is affiliate professor of the Schar School of Policy & Government at George Mason University.