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Climate Change Follies

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Climate Change Follies

President Biden’s war on fracking will raise electricity prices while accomplishing nothing on climate. February 4, 2021
Infrastructure and energy
Politics and law

Don Quixote would be proud of President Biden’s climate-change executive orders, which take windmill-tilting to new heights. They will have no effect on the climate but will fall on the U.S. economy like a cudgel.

The most significant of Biden’s orders is the one banning new drilling permits and hydraulic fracturing (“fracking”) on all federal lands and offshore waters. Though only about 10 percent of fracking now takes place on federal lands, Biden is also calling for a “rigorous review” of permitting and leasing on all public lands. Many believe this is a prelude to a permanent ban on oil and gas development on those lands, and a complete ban on fracking, which progressives advocate.

In some states, such as my own state of New Mexico, fracking on federal lands accounts for more than half of all oil and natural gas production, and royalties from the industry generate more than 30 percent of state revenues. The loss of that revenue will be a major blow to the nation’s post-pandemic economic recovery, especially in western states, where the federal government owns much of the land.

Ironically, fracking bans are likely to lead to greater reliance on more carbon-intensive coal-fired power generation. In the last decade, the huge increase in natural gas supplies and resulting drop in both gas and electricity prices have accelerated the pace of coal plant retirements. That’s one reason why, in the last decade, the U.S. was able to reduce its carbon emissions by about 20 percent—more than any other country.

Restricting fracking and reducing natural gas supplies will cause natural gas prices to rise—and with them, wholesale electric prices, too, providing an incentive for coal power generation. Thus, consumers and businesses will face not only higher prices for gasoline and the natural gas used to heat their homes but also for their electricity.

To counter the resulting economic damage, Biden’s executive order on fracking proposes massive subsidies for federal infrastructure development to create a “sustainable economy,” though precisely what this entails remains unclear. It also proposes a new Working Group on Coal and Power Plant Communities and Economic Revitalization, to be led by former EPA head and current national climate advisor Gina McCarthy, along with Brian Dees, who heads the National Economic Council.

Will such painful economic and social sacrifices “solve” climate change? Not according to John Kerry, President Biden’s climate czar. “Not when almost 90 percent of all of the planet’s global emissions come from outside the U.S.,” he said.

China, the world’s largest greenhouse-gas emitter by far—it accounts for about a third of global carbon emissions, and its share keeps growing—is continuing to build coal plants. So is India, where emissions are also continuing to increase. The world’s two most populous nations have no intention of crippling their economies with higher energy prices. Nor will other developing nations.

A realistic assessment of climate change and its effects, rather than tilting at green windmills, would allow a more informed discussion of the costs and benefits of environmental policies.

Photo by Spencer Platt/Getty Images

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