Yesterday CNBC Squawk Box host Joe Kernan was discussing America's "energy problem" with a large fund manager. The pair managed to conduct the entire segment without actually defining our "energy problem," which I found highly agitating.
Which one fundamental "energy problem" would that be, I wondered:
- 85% of America's energy comes from fossil fuels, the consumption of which produces CO2, thereby contributing to harmful global warming.
- Two-thirds of America's petroleum is imported, leaving the U.S. vulnerable to upset in, or deteriorating relations with, foreign countries, and requires our sending hundreds of billions of dollars abroad each year.
- Clean energy sources, such as solar, wind, geothermal, various forms of nuclear power, will be necessary for the inevitable day when fossil fuels are no longer adequate, but energy price structures in the U.S. do not encourage adequate R&D, nor allow emerging forms of "clean energy" to compete economically and grow to scale.
- Due to their current role in American life, retail motor fuel prices, whenever they approach $4 or $5 per gallon, can/will have a very harmful effect on the overall U.S. economy.
- The U.S. gets almost 50% of its electrical power from coal-burning plants, which are the dirtiest emitters traditional air pollutants as well as the most intense producers of CO2.
- The various policies of state federal governments result in unnecessary barriers to development of domestic fuel resources (e.g. domestic oil exploration) and economical power generation (e.g. new coal plants, economical nuclear plants), while subsidizing uneconomic energy initiatives (e.g. ethanol, pv solar) resulting in energy that is more expensive than otherwise necessary, and heightened reliance on imported oil.
- To date the U.S. has failed to develop a feasible plan for the disposal or reprocessing of nuclear waste from domestic power plants; waste accumulated over decades that remains toxic for millennia.
- "Peak Oil" is here, and within just of few years worldwide production of petroleum will begin to decline for the first time, and continue to decline forever.
- Legal and political barriers in U.S. mean that projects needed to upgrade our energy infrastructure and keep our lights on and our economy competitive -- transmission lines for wind and solar PV farms, new NG pipelines and LNG terminals, new power stations, new oil wells -- face costs in terms of time and money that will cause improvements to be late, too expensive, or impossible.
- Sustainable global per capita energy consumption can only be a fraction of what American consumers use now; Americans simply do not care enough yet about wise use of energy, the need for increased efficiency, and adoption of "green" life choices.
What makes American energy policy and related debates particularly unique and messy -- and interesting -- is the absence of a shared understanding of what The Problem is. The most telling attribute of the list above? While each nomination would surely have a fan base, one can muster a reasonable argument that any on this list is not a problem at all.
Ambiguity may not trouble everyone. Kernan's guest didn't need a specific definition of our nation's travails to nevertheless know its solution: More Natural Gas!
Exit question. For how many of the problems above does the best "solution" include "more government"?